News

Provision of timely data remains poor

Control not about achieving better returns

By Darin Tyson-Chan

A recent poll conducted among SMSF practitioners has revealed the provision of more timely fund data to their clients is still fairly poor, with the majority still offering clients annual information about their funds.

At a SuperConcepts technical webinar last month, the firm revealed nearly two-thirds of accountants and financial planners, 62 per cent, provide their clients with an annual SMSF reporting service.

Conversely, only 6 per cent of those surveyed said they provided daily or regular services to their clients, while another 5 per cent indicated they provided a monthly service. A further 30 per cent of respondents said they provided a service incorporating a mixture of timelines.

“What we can see there is that clearly a number of [service] providers are still using the annual service and that’s fine. We’ve been doing it for so many years as an industry and it’s served us well for so many years.” SuperConcepts Queensland state sales manager Gary Johnston observed.

“I thought it would have been a little bit lower, especially with the onset of TBAR (transfer balance account report) [and measures like that].”

SuperConcepts SMSF technical support executive Nicholas Ali

manager Nicholas Ali echoed Johnston’s sentiments, saying he also thought more practitioners would have adopted more regular reporting techniques by now.

To this end, Ali expressed his surprise the combination of technological developments and regulation requirements had not accelerated the move to more regular reporting practices.

According to Johnston, providing more up-to-date information on SMSFs has some obvious advantages.

“[It means you can] have more regular revaluation of assets and member balances. That’s very critical especially in this day and age of making sure all of our assets are valued at market value, and the member balance is critical especially when starting pensions and [situations] like that,” he noted.

“[Also] the capacity to provide for real-time compliance monitoring is very critical and a lot of the software [applications] will do that already.”

By Darin Tyson-Chan

The main motivating factor of control, in relation to SMSF establishments, is not driven purely by a desire to generate better investment returns, a senior funds management executive has said.

“Control is more than just performance. I’ve certainly sat in on research interviews with SMSF trustees where they’re prepared to trade off performance, and have lower performance in their SMSF, on the basis they’ve got control,” Vanguard head of corporate affairs Robin Bowerman said.

The “Vanguard/Investment Trends 2021 SMSF Investor Report” showed between 2015 and 2021, 72 per cent of trustees cited having more control of their investments as the main reason why they started an SMSF and another 52 per cent said they were Control more than just performance.

motivated to run their own super fund to achieve better returns.

Investment Trends head of research Irene Guiamatsia noted the responses were related to levels of transparency within public offer funds, as well as the restricted asset classes these retirement savings vehicles traditionally offer.

“If you look at super member engagement research we see very few members actually know which investment options they are in let alone know which [assets] are underneath those investment options,” Guiamatsia said.

“So if you are someone who likes to know everything, you perhaps want to own certain things … [for example] if I actually want to invest in Tesla, or if you want to invest in an investment property or some other very specific thing you want or perhaps ESG (environmental, social and governance) [an SMSF has proven to be appealing].

“For that pool of people, often they don’t feel that they know what is going on and if they would like to have that control, that tends to be a huge driver of setting up an SMSF.”

The “Vanguard/Investment Trends 2021 SMSF Investor Report” analysed responses from an online survey conducted among SMSF trustees between March and April.