A financial services software company has predicted modelling technology that analyses the investment objectives or benefits of insurance for SMSFs will be a key development area for fintech firms.
Midwinter managing director Julian Plumber says while there has been a lot of attention on creating applications for the administration of SMSFs in recent years, the next big trend will be modelling potential scenarios for SMSFs.
He said this modelling technology will help analyse the potential outcomes expected as a result of implementing certain types of strategies for SMSFs.
“Reserving strategies are one example. Reserves in an SMSF are usually used to achieve objectives like investment smoothing or self-insurance,” Mr Plumber said.
“At the moment, we have a lot of advisers calling up and asking how they can model the potential outcomes for clients. They want to know what will happen if they push the earnings of those assets into a pinch reserve and how that impacts on the client’s expected income at retirement.”
Mr Plumber said the modelling technology can also be used to determine the best method of segregating assets, which has received more attention following the budget.
“There’s far more emphasis on the segregation of assets within SMSFs, and how would you want to divide the lower income assets or higher growth assets across the pension and accumulation portions of the SMSF.
“Due to the federal budget, these are the conversations a lot more advisers are having and they’re looking to the software providers to make sure that the technology’s there to make it easy for them to generate advice on this.”
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