SMSF practices cautioned on cheap licences
One SMSF firm has warned newer SMSF practices about some of the cheaper licences on offer in the market, since the support they provide to authorised representatives is often limited.
Speaking to SMSF Adviser, Omniwealth managing director Matthew Kidd said while it may be tempting for new practice owners managing the substantial costs associated with setting up a business to go with one of the cheaper licences, often the business ends up losing out in the long run.
“There are some really cheap licences, but the cheaper the licence the less support you’re going to get,” said Mr Kidd.
“In the end, you end up doing a lot of the work yourself, and if you put a time value on that it means you’re losing about five hours a week doing something else and you’re not out there selling and that’ll cost you.”
Practice principals also often make a similar mistake with outsourcing, he added.
“There are some terrific outsource companies that can do your para-planning work for you, and yes, it’ll cost you, but this is where people make the mistake,” said Mr Kidd.
“They think, well, that’s going to cost me $500, I can do that myself – and well, yes, you could do it yourself but that means you’re not out there winning two new clients.”
Mr Kidd said this approach would mean that while the business has saved $500, it potentially has also lost $5,000 worth of new work.
“You’ve got to put a value on your time,” he said.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.