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Back to basics: What do your clients want?

By Tim Mackay
11 December 2013 — 3 minute read

Advisers need to understand the psychology of trustees to keep a firm hold of the SMSF market.

As specialist SMSF advisers, while we dedicate significant time to developing our technical SMSF skills, we don’t spend nearly enough time determining what exactly our SMSF clients want.

A key mantra of any reputable marketer is ‘know your client’. What makes them tick? What they are passionate about? These are great questions and, given there are just under one million SMSF members, clearly there isn’t one single correct answer.


However, as an SMSF specialist, I believe SMSF clients share key traits. I’ve combined my experience with the findings of the 2012 Rice Warner surveys into SMSF members to provide insights for those seeking to serve this important market.

SMSF members are highly inquisitive people – they ask lots of detailed questions to ensure their potential adviser knows what they are talking about. Likewise, the survey revealed the vast majority of SMSF members were tertiary-qualified; had above average knowledge of financial literacy and investment concepts; and that SMSF members are most satisfied with complex SMSF advice and least satisfied with basic SMSF advice.

From an adviser perspective, the starting point is meeting them on their educational level (by holding a relevant degree) and proving you are a qualified expert in SMSFs (by obtaining an SMSF specialist qualification). Once suitably educated and qualified, be prepared to answer a lot of complex questions.

Nearly all SMSF members are physically and mentally healthy - Rice Warner found 95 per cent of SMSF members were in good health. This characteristic should not be surprising – those who don’t feel comfortable about their health are far more likely to favour the relative ease of an industry fund or a retail fund.

Healthy SMSF members will likely live longer. For advisers this means many SMSF members won’t seek an adviser who is close to retirement. Before all the young advisers jump for joy, be mindful that these same SMSF members also value highly the sage experience of a silver-haired adviser.

If your practice can balance the experience of age and the longevity of continued service, then you are well positioned. Younger advisers working with an older adviser in a mentoring or advisory role can serve SMSF clients extremely well.

With significantly higher than average net worth, SMSF clients are successful in their working lives and nearly all have passions outside of work. There is seemingly no rhyme or reason to their varied passions apart from one commonly held passion - travel.

As successful business people, many already have considerable experience of running multiple structures including companies, family trusts and other vehicles. They have high levels of engagement with these vehicles, typically via their accountant, with tax management a key goal.

If you want to advise SMSFs, you will be well served by having a thorough understanding of the benefits and uses of all complementary vehicles. To optimise the service you provide SMSF clients, you’ll need to stay actively engaged with them and have a strong working relationship with their accountant.

Consider for a moment the psychology of SMSF members who love travelling. Travel removes them from their safe and secure comfort zone; challenges them; teaches them new ways of looking at things; enables them to interact on a personal level.

Present their SMSF as the vehicle that will fund their exciting lifestyle in retirement. Apply the lessons from travel psychology to your SMSF service. Challenge them with interesting materials, get them to look at their investments in different ways, interact continually with them on the things that are important to them.

The Rice Warner survey found that most SMSF members don’t intend to leave the proceeds of their SMSF to their children (with the family home as the key estate planning asset). It’s clear that the sole purpose of the SMSF is to fund their exciting lifestyle in retirement so make sure you know what your client’s ideal lifestyle looks like.

Rice Warner found a whopping 87 per cent of SMSF members are happy with the returns in their SMSF. These are people who derive pleasure from the control and flexibility an SMSF provides. They have taken control of their family’s financial destiny with their own SMSF and seek expert advice that helps meet their key goal of supporting their family’s desired lifestyle in retirement.

Despite their best endeavours and ample resources, given the psychology of SMSF members I seriously doubt that any of the large institutions can successfully capture significant market share in the SMSF space. Those best placed to serve this exciting, growing market are highly qualified and experienced SMSF specialists.

Tim Mackay, principal and wealth adviser at Quantum Financial.


Back to basics: What do your clients want?
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