2016 Self Managed Super Fund: Accountant & Planner Surveys · 2016 Self Managed Super Fund Planner Report are based on detailed online surveys of accountants in public practice and

Survey Highlights 2016 Self Managed Super Fund: Accountant & Planner Surveys

© 2016 Investment Trends 1

2016 Self Managed Super Fund:

Accountant & Planner Surveys

1Copyright 2016 Investment Trends Pty Ltd. Highlights from the 2016 SMSF Accountant & Planner Survey. Reproduction prohibited.

Report released: April 2016 Reproduction strictly prohibited

Highlights from the

2016 Self Managed Super Fund:

Accountant & Planner Surveys



Thank you

I would like to thank all the survey respondents who participated in our 2016

Self Managed Super Fund Surveys in February.

Your participation provides valuable feedback to our clients and the regulator

on how accountants and planners interact with SMSFs, the challenges they

face and where the opportunities to help you and your SMSF clients exist.

These highlights gather some of the most interesting results from our

accountant and planner research. We have also included some key results

from our latest research of SMSF trustees highlighting the current advice

opportunities.

We hope you find the insights in this pack as fascinating as we did.

Many thanks,

Mark Johnston

Founder & CEO

Investment Trends

Suite 2102, Goldfields House

1 Alfred Street

SYDNEY NSW 2000

Australia



Table of contents

Methodology & scope 4

Trends in super fund assets 5

Trends in number of SMSFs 6

Areas of advice sought by SMSF trustees 7

Relationships between planners and accountants when servicing SMSFs 8

Financial planner selection criteria 9

Planners’ challenges in servicing SMSFs 10

SMSF planners’ investment priorities 11

Planners’ view on best platform for SMSFs 12

Planners’ admin support provider 13

Accountants’ challenges in servicing SMSFs 14

Accountants’ licensing intentions 15

Accountants’ involvement in investment advice 16

Accountants’ view on best platform for SMSFs 17

About Investment Trends 18



Methodology & scope

The February 2016 Self Managed Super Fund Accountant Report and February

2016 Self Managed Super Fund Planner Report are based on detailed online

surveys of accountants in public practice and financial planners conducted in

February 2016.

The surveys examine the roles played by accountants and planners in servicing

SMSF trustees and their interactions with other professional advisers, software

providers, specialist SMSF administrators, investment platforms and

investment product providers.

After data cleaning and de-duplication, a total of 1,182 responses were

received from accountants in public practice. The maximum sampling error

(centre of the range) at the 95% confidence interval for the accountant sample

is +/-2.8%. For the planner research, a total of 573 responses were received,

393 of which were from planners who actively advise clients with an SMSF.

This gives a maximum sampling error of +/-4.9% for SMSF planners. Note that

analysis of smaller subgroups will have a higher sampling error.

Throughout this report, we refer to planners who currently advise SMSF clients

as ‘SMSF planners’ and accountants who currently service SMSF clients as

‘SMSF accountants’.



Trends in super fund assets

According to APRA, SMSF assets grew by 6% to $595bn

in the year to December 2015

According to the APRA Quarterly Superannuation Performance Report, SMSFs

retained the largest proportion (29%, $595bn) of super fund assets, followed by

retail super funds (26%, $540bn) and industry super funds (22%, $446bn).

The SMSF sector has continued to grow over the 12 months to December 2015, with

total SMSF assets increasing by 6% ($32bn). After outpacing the growth of SMSFs

over the preceding two years, APRA-regulated super funds grew at a similar pace

over the year to December 2015 (6%, $85bn) to $1.4trn.


According to APRA, SMSF assets increased by just 6% ($32bn) to $595bn in the year to December 2015. After outpacing SMSFs over the past two years, APRA-regulated funds grew at a similar rate in the year to Decembe r 2015

0

100

200

300

400

500

600

700

Jun-

95

Dec-9

5

Jun-

96

Dec-9

6

Jun-

97

Dec-9

7

Jun-9

8

Dec-98

Jun-9

9

Dec-99

Jun-0

0

Dec-00

Jun-0

1

Dec-01

Jun-0

2

Dec-02

Jun-0

3

Dec-03

Jun-04

Dec-0

4

Jun-

05

Dec-0

5

Jun-

06

Dec-0

6

Jun-

07

Dec-0

7

Jun-

08

Dec-0

8

Jun-0

9

Dec-09

Jun-1

0

Dec-10

Jun-

11

Dec-11

Jun-

12

Dec-12

Jun-

13

Dec-13

Jun-

14

Dec-14

Jun-

15

Dec-15

$ b

illio

n

SMSFs

Retail

Industry(retrospectivelyreclassified)

Public sector(retrospectivelyreclassified)

Corporate

Super fund assets (Source: APRA Quarterly Superannuation Performance Report)



Trends in number of SMSFs

The number of SMSFs reached 567,000 in December 2015 The number of SMSFs continued to grow over 2015, reaching 567,000 in December

2015, up from 541,000 in December 2014. This represents a 4.8% annualised (net)

SMSF establishment rate (up from 4.5% in 2014), but remains below the longer term

average of 5.9%.

SMSFs’ pathway to establishment has evolved in recent years with word of mouth

and the media playing increasing important roles in initiating SMSF establishment

(27% of SMSFs established in the last year, versus 10% 10 years ago)

Advisers still play a significant role in initiating SMSF establishment, with 32% of

SMSFs saying they were established following a recommendation from their

accountant, and a further 13% due to advice they received from a planner.


APRA reports there were 567k SMSFs as of December 2 015, up 5% over the year

Number of SMSFs(Source: APRA Quarterly Superannuation Performance Report)

567k552k

354k

382k

414k428k

440k

458k474k

493k503k

517k525k

541k

341k

315k302k

367k

403k393k

Jun-

06

Sep-0

6

Dec-0

6

Mar-

07

Jun-

07

Sep-0

7

Dec-0

7

Mar-0

8

Jun-

08

Sep-0

8

Dec-0

8

Mar

-09

Jun-

09

Sep-0

9

Dec-0

9

Mar

-10

Jun-

10

Sep-1

0

Dec-1

0

Mar

-11

Jun-

11

Sep-1

1

Dec-1

1

Mar

-12

Jun-

12

Sep-1

2

Dec-1

2

Mar-

13

Jun-

13

Sep-1

3

Dec-1

3

Mar-

14

Jun-

14

Sep-1

4

Dec-1

4

Mar

-15

Jun-

15

Sep-1

5

Dec-1

5



Areas of advice sought by SMSF trustees

45% of SMSFs say they have unmet advice needs SMSFs’ appetite for advice rebounded to the highest level observed, with 45% (up

from 39% in 2015) saying they have unmet advice needs. The most common areas

that SMSFs would like to receive advice on are related to retirement, including

inheritance & estate planning, SMSF pension strategies and the Age Pension & other

entitlements.

In the current market environment, SMSFs are finding it increasingly challenging to

identify investment opportunities for their fund. As a result, more would like to

receive advice on investment-related topics than prior years, including investment

strategy/portfolio review, identifying undervalued assets and ETFs.

Only 30% intend to turn to a financial planner for their advice needs, while 52%

would turn to an accountant. Planners can win from forming referral relationships

with accounting firms, as this will help them reach a greater share of the SMSFs with

unmet advice needs.


% of SMSFs who have unmet advice needs

45% 43%

39%

45%

2013[n=1116]

2014[n=1078]

2015[n=1001]

2016[n=2519]

The proportion of SMSFs who say they have unmet adv ice needs reached the highest level observed. Advice needs most often rel ate to retirement, though more are citing investment-related advice ga ps

Excerpt from 2016 SMSF Investor Report

24%

22%

22%

20%

20%

0% 10% 20% 30% 40% 50%

Inheritance &estate planning

SMSF pensionstrategies

Age pension (&other social

securityentitlements)

Investmentstrategy/portfolio

review

Identifyingundervalued

assets

2015 [n=1001]

2016 [n=2519]

Q26 Are there any areas in regards to your SMSF in which you would like to be receiving financial advice, but cu rrently aren't?

(Multiple responses permitted) Among SMSFs with adv ice needs

Inheritance & estate planning

SMSF pension strategies

Age pension (& other socialsecurity entitlements)

Investment strategy/portfolio review

Identifying undervalued assets



Relationships between planners and

accountants when servicing SMSFs

Most planners and accountants are already working

together to service the SMSF market Five out of six planners say they currently work with accountants to service the SMSF

market. This includes 33% who have in-house accountants or joint ventures with one

and 51% who have established referral relationships with accountants. Similarly,

85% of SMSF accountants have established relationships with planners. Over the past few years, both planners and accountants have been moving to

establish working relationships with each other to service the SMSF market and both

groups expect this trend to continue over the medium term. Our analysis reveals

that accountants and planners who partner up tend to be more successful in the

SMSF space.


One in three financial planners say they currently employ in house accountants (or have a joint venture with accounting firms). Just o ver half of accountants (53%) say they employ in-house planners (or have a joint vent ure with planning firms)

Relationships between SMSF planners and SMSF accoun tants when servicing the SMSF market

In-house/joint venture with accounting firms, 33%

In-house/joint venture with financial planning firms,

53%

Have referral relationship with accounting firms,

51%

Have referral relationship with financial planning

firms, 32%

No relationship with accounting firms, 16%

No relationship with financial planning firms,

15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

All SMSF planners [n=430] All SMSF accountants [n=822]



Financial planner selection criteria

Planners who promote SMSF expertise will find it

easier to attract these clients

Half of SMSFs say ‘honesty/integrity’ is the top quality they look for when selecting a

financial planner. Compared to last year, there are more SMSFs who cite SMSF

expertise (46%, up from 38% in 2015), ability to explain concepts in a way they can

understand (45%, up from 38%) and experience (40%, up from 35%) among the top

three attributes they look for when selecting a financial planner.

When it comes to selecting accountants, tax expertise (52%), SMSF expertise (47%)

and honesty/integrity (44%) are the most widely desired qualities.


50%

46%

45%

43%

40%

0% 10% 20% 30% 40% 50% 60% 70%

Honesty/integrity

Expertise in SMSFs

Ability to explain concepts in away I can understand

Detailed knowledge ofinvestment products

Experience2015 [n=194]

2016 [n=447]

Q22 What were the top three things you were looking for when selecting [your main adviser]? (Multiple responses permitted) Among SMSFs who have used a financial planner in th e last 12 months

(Top 5 shown)

Expertise in SMSFs, the ability to explain concepts and experience are growing in importance as drivers when selecting a financial planner

Excerpt from 2016 SMSF Investor Report



Planners’ challenges in servicing SMSFs

SMSF planners typically cite fewer challenges (4.0, down

from 4.2 in 2015) in servicing the SMSF market

The top three challenges faced by financial planners when servicing SMSF clients are

‘compliance’ (35%, down from 40%), ‘accountants setting up SMSFs for unsuitable

clients’ (33%, steady) and ‘educating clients about their responsibilities as trustees’

(29%, down from 32%).

SMSF generalists (planners with 1 to 20 SMSF clients) face different challenges to

SMSF specialists (planners with more than 20 SMSF clients), partly because the latter

group has closer relationships with accountants. SMSF generalists find it more

challenging to acquire SMSF clients and deal with clients’ accountants, while

specialists say lack of integration between their systems and the accountants’

systems is a critical issue.


SMSF planners typically cite 4.0 challenges each in servicing the SMSF market, down from 4.2. A growing proportion see grey areas on wh at accountants can/can’t advise on and lack of integration between systems a s a challenge

35%

33%

29%

28%

25%

0% 10% 20% 30% 40% 50%

Compliance

Accountants set up SMSFs forunsuitable clients

Educate clients aboutresponsibilities as trustees

Administration

Grey areas on what accountantscan/can’t advise 2015 [n=390]

2016 [n=325]

Q70 What are your biggest challenges in servicing t he SMSF market? (Multiple responses permitted) Among SMSF planners ( Top 5 shown )

Average no. of selection:

4.2

4.0



SMSF planners’ investment priorities

70% of SMSF planners cited diversification as their main

goal when selecting investments for SMSF clients

When selecting investments for SMSF clients, diversification (70%) is planners’ top

investment priority, followed by capital growth (51%) and capital preservation (47%).

Compared to last year, more planners see capital preservation (47%, up from 42% in

2015) to be a priority when selecting investments for their SMSF clients, which

corresponds with SMSF trustees moving to a more conservative investment

approach.

More planners are also citing high income (31%, up from 28%) as an investment

priority. This is in line with more SMSFs prioritising building a sustainable income

stream when selecting investment for their fund.


Q29 What are your top priorities when selecting inv estments for your SMSF clients? (Multiple responses permitted) Among SMSF planners [n=358]

70%

51%

47%

46%

40%

37%

32%

31%

30%

30%

22%

20%

16%

7%

4%

3%

3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Diversification

Capital growth

Capital preservation

Liquidity

Transparency

Lower cost products

Investments are simple to understand

High income

Investments are tax effective

Financial strength of provider

Good research provider ratings

Outcome oriented investments

Security (low risk)

Investments are 'set and forget'

Short term growth prospects (<12 months)

Geared/leveraged products

Other

Diversification, capital growth and capital preserv ation are SMSF planners’ top investment priorities when selecting investments fo r their SMSF clients



Planners’ view on best platforms for SMSFs

BT Wrap is nominated by planners as the most suitable

platform for making SMSF investments

BT Wrap is the platform which SMSF planners most widely consider to be the ‘best’

for their SMSF clients (cited by 16%), followed by North (10%), Macquarie Wrap (9%)

and CFS FirstWrap (9%). The recently launched BT Panorama and CFS FirstChoice

round out the top 6 best platforms for SMSF clients.


Q59 Which platform do you think is the best for mak ing SMSF investments? Among SMSF planners who use platforms for their SMS F clients [n=231]

(Top 6 shown )

16%

10%

9%

9%

7%

6%

0% 5% 10% 15% 20% 25% 30%

BT Wrap

North

Macquarie Wrap

CFS FirstWrap

BT Panorama

CFS FirstChoice

BT Panorama has surged by share of SMSF planners no minating it as the best platform for SMSF investments



Planners’ admin support provider

37% of SMSF planners use SMSF admin services to

administer their SMSF clients

More planners are turning to accountants to administer their SMSF clients (46%, up

from 30% in 2013), which comes at the expense of SMSF admin services (37%, down

from 48% in 2013).

Where planners use SMSF admin services, AMP is the most-widely used provider

with over half of planner relationships. AMP has further extended its lead in this

space with its acquisitions of superMate and JustSuper.


Q46 Do you use SMSF admin services to administer yo ur SMSF clients? Among SMSF planners

48% 44%40% 37%

30% 38% 45%46%

23%18% 16% 18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 [n=229] 2014 [n=252] 2015 [n=412] 2016 [n=340]

We do the adminwithin our firm only

We use anaccountant only

Yes, for some (orall) of my SMSFclients

Planners are increasingly turning to accountants fo r SMSF admin,with fewer using SMSF admin services



Accountants’ challenges in serving SMSFs

Changes to the licensing regime is the top cited challenge

faced by accountants when servicing the SMSF market

Nearly all SMSF accountants say they face challenges when servicing the SMSF

market. Changes to the licensing regime (50%), competitive pricing & fee recovery

(47%) and educating clients on their responsibilities as trustees (44%) are the top

challenges.

Being restricted in their advice stands out as a key challenge among accountants

who are not authorised representatives. Results from our 2016 SMSF Investor Report

shows that accountants who offer a comprehensive financial advice proposition will

be setting themselves up for success, with many SMSFs saying they would like to

turn to an accountant for their unmet advice needs.


Nearly all SMSF accountants are facing challenges i n servicing the SMSF market. These challenges most often relate to the licensing regime (50%)and competitive pricing & fee recovery (47%)

Q14 What are your biggest challenges in servicing t he SMSF market? (Multiple responses permitted) Among SMSF accountan ts [n=1079] ( Top 5 shown )

50%

47%

44%

38%

32%

31%

Changes to the licensing regime

Competitive pricing & fee recovery

Educating clients

Compliance obligations

Attracting new clients

Restrictions on providing financial planning advice



Accountants’ licensing intentions

13% of SMSF accountants already operate under a full AFSL,

and a further 11% intend to do so by July 2016

With the deadline for the removal of accountants’ licensing exemption looming,

some accountants have already made the move to become licensed. 17% of

accountants currently operate under either a full or limited AFSL, and an additional

39% intend to do so by July 2016. 27% of accountants say they do not intend to

become licensed and will instead outsource SMSF advice to someone else, while few

(4%) plan to stop advising on SMSFs altogether.

Among accountants who intend to operate under a limited AFSL, two-thirds intend

to outsource the advice if it goes beyond the scope of what they can advise. Financial

planners can further grow their SMSF business by working closely with these

accountants.


Q23 With the implementation of the new licensing re gime, what do you intend to do by July 2016? Among SMSF accountants [n=721]

11%

28%

27%

4%

13%

4%

13%

0% 10% 20% 30% 40% 50%

Plan to obtain a full (RG146)licence

Plan to obtain the limitedlicence

Do not intend to be licensed &will outsource SMSF advice

Plan to stop advising onSMSFs altogether

Other

I don't know

Operating under limited AFSL

Operating under full AFSL

As more accountants move to operate under a full (o r limited) AFSL, fewer say they intend to do so

Plan to obtain a full (RG146)licence

Plan to obtain the limited licence

Do not intend to be licensed &will outsource SMSF advice

Plan to stop advising on SMSFsaltogether

Other

I don't know

Operating under limited AFSL

Operating under full AFSL



Accountants' involvement

in investment advice

One in four of SMSF accountants plan to recommend

investments to their SMSF clients in the future

Only 11% of SMSF accountants currently recommend investments to their SMSF

clients. A further 14% intend to do so in the future.


Only 11% of SMSF accountants say they currently rec ommend investments to their SMSF clients. A further 14% intend to do so in the future

Q60 Do you currently recommend investments to your SMSF clients? Among SMSF accountants [n=777]

I have advised on this & intend to continue, 11%

I haven't advised on this & don't intend to do so, 69%

I haven't advised on this but may do so in the

future, 14%

I have advised on this but won't in future, 5%



Accountants’ view on best platform for SMSFs

BT Wrap is most widely nominated by accountants as the

most suitable platform for their SMSF clients

61% (up from 57% in 2015) of SMSF accountants are able to nominate a platform as

most suitable for SMSFs. Among those who do, BT Wrap is the platform which SMSF

accountants most widely consider to be the ‘most suitable’ for their SMSF clients

(cited by 34%), followed by Macquarie Wrap (26%) and Asgard eWRAP (7%). MLC

Wrap (7%) and netwealth (4%) round out the top five platforms accountants

consider to be the 'most suitable' for SMSFs.


SMSF accountants most widely consider BT Wrap and M acquarie Wrapto be the ‘most suitable’ platforms for SMSFs

34%

26%

7%

7%

4%

BT Wrap

Macquarie Wrap

Asgard eWRAP (including Infinity)

MLC Wrap/Navigator

netwealth

Q99 Which investment platform do you think is the m ost suitable for SMSFs? Among SMSFaccountants who nominated a platform as being 'most suitable [n=268] ( Top 5 shown )

% able to nominate a platform as most suitable for SMSFs

49%57% 61%

2014 [n=229] 2015 [n=679] 2016 [n=442]



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Documents

2016 Self Managed Super Fund: Accountant & Planner Surveys · 2016 Self Managed Super Fund Planner Report are based on detailed online surveys of accountants in public practice and