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SMSF trustees uneasy about offshoring, survey reveals
An overwhelming majority of SMSF trustees are uncomfortable with their personal financial records being processed and stored offshore, according to a recent survey.
A survey of SMSF trustees conducted by SMSF administration firm Superfund Wholesale found that 70 per cent of respondents were uncomfortable with their personal financial records being processed and stored offshore, while 93 per cent of respondents had a negative view of accountants and advisers sending work to offshore suppliers.
The survey also indicated that the recent global ‘Petya’ and ‘WannaCry’ ransomware attacks also caused concerns for SMSF trustees about the security of personal financial data.
Almost all survey respondents, or 97 per cent, believe offshoring is not secure.
SuperFund Wholesale director Kris Kitto said among the SMSF trustees surveyed, an overwhelming majority or 95 per cent, said if they were advised their personal financial information was going to be sent offshore, they would reconsider the services offered.
“Overall, 84 per cent of respondents were extremely or very likely to switch accountants or advisers if they started sending their personal financial information offshore, and stated that they would rather keep their personal financial data in Australia than receive a fee discount and go offshore,” said Mr Kitto.
Mr Kitto said there has been a rise in Australian accounting and advice businesses outsourcing parts of their operations to offshore providers.
“The ATO and the professional accounting bodies require accountants to inform clients when their work is being sent overseas. However, clients are often oblivious to this practice as disclosures are buried deep in the fine print of the engagement letter or agreement,” said Mr Kitto.
“The SMSF trustees we surveyed believe that as soon as their personal financial information goes overseas, they lose control and the security of their data is significantly diminished. The perception of clients is that outsourcing their accounting work offshore is not secure – and perception is king.”
While this article would appear to be an exercise in self promotion, it does make a valid point - client perception is king. One data security breach will taint the whole offshoring community.
But for now offshore operations are a fact of life. For offshore operations to work the integrity of the staff and management must be irreproachable.
It has been reported that AMP SMSF (Superconcepts) has acquired (or partnered depending on the source) with BPO Connect for its offshore outsourcing solution. What is of concern here is that (according to SMH -3 Jul 17) the Managing Director of this firm has recently pleaded guilty to defrauding the Commonwealth of $770K.
Hardly great timing for the management team of Superconcepts who in late June announced the closure their Victorian operations with roles shifting to South Australia & India. One needs to ask how solid was the due diligence here.
0- Opportunistic article with complete self interest at its core. Why don't you give us more details of the survey like the number of trustees surveyed, profile of the trustees & other relevant information - sorry but quoting percentages is just nonsense. The article is based on ignorance of what offshoring is all about and the key drivers for offshoring (its not just a cost play) and I would argue that our firms information security is any day better than what is currently being delivered onshore. SMSF Advisor should not be publishing such self interested opinion pieces.
0- From a SMSF perspective, what are the key drivers for offshoring? I would have thought cost was number 1 and everything else a very distant second.0
- Actually no, if cost is the main driver then you shouldn't be doing it. Cost savings are a given. The true benefits of offshoring revolve around creating a scaleable back office, a more process orientated, efficient back office that will enable you to grow your business without resourcing constraints.0
- If you think SMSF administrators are back office staff then you are in the wrong business.
SMSF administration is more than processing transactions. Staff have to identify issues & opportunities to assist clients.
The best administrators are professionals skilled both accounting & superannuation. Somethng that you do not get in an offshore operation.0
- Would have to question the sample base of respondents! From an admin firm that claims not to outsource in their marketing.....results seem to skew towards them!0
- The sample are the trustee of Kitto Family Super Fund :)0
- I find that really interesting, given most of the large banks and platforms, with the exception of CBA all run offshore back office operations. As does one of the largest SMSF software providers in Australia -
meaning information is being accessed offshore in a number of ways. Sometimes trustees need to be reminded of this.0 - How many trustees were surveyed? This sounds like an article that is promoting self interest by someone with their own agenda.0
- It is interesting that Mr Kitto launched his survey post AMPs plans to close their operations in Victoria and shift work to Adelaide and their new Indian operations.
Opportunistic PR at its worst. Real people are losing their jobs. Real people with families and mortgages.
This is a cheap shot at a competitor hoping that Trustees will shift to an onshore (or his onshore) solution
Shame Mr Kitto. Shame.0
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