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Proportion of advised SMSFs declining

Miranda Brownlee
20 June 2022 — 1 minute read

While the number of SMSFs using a financial adviser has remained steady, the overall proportion of advised SMSFs has seen a dip, according to recent research.

A recent research report produced by Vanguard and Investment Trends has shown that the number of SMSFs has remained steady at around 160,000.

Investment Trends head of research Dr Irene Guiamatsi said in the midst of everything this could be construed as very good news, given that the number of people using advice generally seems to be falling.

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“However, given that the overall population of SMSFs has increased, this represents a decline in the proportion of funds actually receiving advice,” Dr Guiamatsi noted.

The research modelling indicates that the proportion of funds using an adviser has dropped to 27 per cent.

Among the SMSF members who don’t currently use an adviser, 240,000 stated that they had unmet advice needs while 200,000 indicated they did not feel the need to seek financial advice.

The research found that some of the top reasons for not using an adviser include the cost involved and a perception by unadvised SMSF trustees that financial advice is unnecessary.

Dr Guiamatsi explained that the reluctance of SMSF trustees stems from perceptions rather than lived experience using an adviser.

Vanguard Australia head of personal investor Balaji Gopal said previous research has shown that advice provides quantifiable value across the board, with clients attributing 5 per cent of their portfolio value to advice.

“Periods of market volatility like what we’re currently experiencing further highlights the value of advice and the benefits that an adviser can deliver, whether it is investment expertise or coaching for emotional reassurance,” said Mr Gopal.

The research also revealed that the hardest aspect of running an SMSF is keeping on top of the required administration and compliance. In particular, SMSF trustees stated that they found keeping track of changes in rules and regulations, completing paperwork, and lodging end of year tax returns to be difficult.

Succession planning was listed as the second hardest aspect of running an SMSF.

 

Miranda Brownlee

Miranda Brownlee

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 also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: [email protected]momentummedia.com.au
Proportion of advised SMSFs declining
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