SMSF Awards 2021: part 1

In a year punctuated by lockdowns, video meetings and remote working, the SMSF sector barely skipped a beat adapting to market and regulatory changes as they arrived, with service providers leading from the front supporting advisers and their clients. The ninth annual selfmanagedsuper CoreData SMSF Service Provider Awards recognised those organisations that did it best and Tia Thomas, Zoe Paterson and Jason Spits take a look at which firms found favour with advisers in the past year.

For many people who spent much of 2021 working from home, the ‘unprecedented’ and ‘new normal’ of the previous year quickly became familiar as they settled into changing ways of working and interacting with clients and colleagues.

The blunt shock that was the market downturn of March 2020 was also quickly overcome as COVID-19 relief and mitigation measures were processed and integrated into daily life.

For investment providers operating with SMSF clients, this was a chance to prove their bona fides and demonstrate in a very short period of time the trust placed in them was well founded as markets rode the roller coaster of downturn, stimulus and upturn.

With the budget returning to its usual slot in May, the federal government adopted a superannuation-friendly plan in 2021, which was widely welcomed for its ‘housekeeping’ approach rather than the drastic revisions seen in the past.

And to their credit, SMSF service providers have not only been integrating these changes, but leading discussions about their impact on SMSFs, trustees and fund members, with their own technical experts engaging with the ATO and Treasury seeking clarity on the details.

Yet, it has not all been plain sailing for the SMSF sector, with the ATO’s final ruling on non-arm’s-length expenditure (NALE) and new auditor independence rules set to play out well into the future.

While the full impact of NALE may not be seen until the ATO resumes compliance action, auditor independence changes have been in place since 1 January and the flow-on effects mean audit firms will remain central to the operation of the SMSF sector.

It is in this context of change, readjustment and realignment that the 17 firms named as the leading service providers for SMSF advisers 2021 have operated and, according to those in advisers who voted for them, also excelled.

There are some familiar names in the winners’ circle for the selfmanagedsuper CoreData SMSF Service Provider Awards 2021 along with other organisations being recognised for the first time.

CoreData principal Andrew Inwood, who oversaw the collection and analysis of the adviser feedback, says the service providers that were named as leaders usually have good processes in place, an ability to meet the need of advice practitioners or have become entrenched in the market due to a consistent provision of services over the years.

Inwood notes the COVID-19 pandemic has continued to put stress on the SMSF sector, but service providers have maintained their high levels of delivery during this period.

According to Inwood, it is important to have the views of advice practitioners in the SMSF sector and the research behind the awards gave a good understanding of their opinions on service providers.

“The awards were based on a survey of 585 advisers and accountants, conducted in June and July, and this was a voting sample so it was frequency of use and satisfaction which drove the numbers,” he explains.

Long-term awards sponsor La Trobe Financial echoed Inwood’s comments, with its director of client partnerships Lilian Chin saying: “It is important we support these awards as they recognise the best of the best in the industry.

“With the judging undertaken by advisers, these awards are truly demographic and representative of the market’s voice, and this is a simple and critical difference compared with other awards.” - by Jason Spits

Actuarial certificate provider winner: Accurium

The heart lies in client service

By Tia Thomas

The focus on providing exceptional client services is what Accurium managing director Doug McBirnie believes makes the actuarial certification provider stand out from the competition.

Founded in 1980, Accurium has grown to become one of the largest suppliers of actuarial certificates and educators in the SMSF sector with around 3800 clients Australia wide, which McBirnie accredits to its strong client relationships.

“Our clients want our systems to be intuitive and easy to use. So we have continued to lead the way in terms of that particular client portal mantra for a number of years around speed and accuracy,” he explains.

As for Accurium winning the actuarial certification provider category in the selfmanagedsuper CoreData SMSF Service Provider Awards for 2021, McBirnie notes: “The reason why we won comes from our client services team providing quality client support, which also comes from our technical services team providing clients with support and understanding while navigating the complex regulatory framework.”

Numerous accountants and SMSF professionals struggled to adapt to the digital work environment following the coronavirus outbreak and Accurium responded by increasing online content with over 135,000 resources and attracting nearly 20,000 live webinar attendees.

“We’ve really focused on building out our educational offerings. We have an online portal called the TechHub, which is an online learning platform designed to help clients expand their knowledge to gain valuable accredited CPD (continuing professional development) hours,” McBirnie says.

“We’ve also looked at partnering with experts across the sector to bring new perspectives and different content, such as a series we did on practice management.”

Recently Accurium was acquired by accounting and financial advisory firm CountPlus for $9 million, but McBirnie points out the values of the organisation will remain the same.

“CountPlus shares a vision with Accurium for where we can take the business, particularly in the education space. We will continue to operate as a stand-alone business and all the team coming across is part of the transaction,” he says.

As the SMSF environment continues to rapidly change, he says educational services are a way to provide stability for advisers in the future.

“Accurium has had pretty good feedback from clients on the webinar classes we’ve hosted so far. We will continue to add other resources to the TechHub, including the introduction of CPD reading assessments, a live question and answer service, and new calculators,” he says.

The actuarial certificate provider has also published a series of blog posts for subscribers of its TechHub covering the latest sector issues such as the new superannuation legislation being tabled in parliament.

ETF provider winner: BetaShares

Delivering on their promise

By Jason Spits

In uncertain times people will do business with those they trust, according to BetaShares chief executive Alex Vynokur, who sees that as one of the reasons financial advisers named his firm as the leading organisation in the exchange-traded fund (ETF) category in this year’s selfmanagedsuper CoreData SMSF Service Provider Awards.

“The financial advice sector is aware of the benefits of ETFs, such as cost, liquidity and transparency, and during times of nervousness they deliver what it says on the tin,” Vynokur says.

In a year in which the ETF sector passed $100 billion in assets under management (AUM), BetaShares also hit its straps, experiencing an increase in AUM from $10 billion to $20 billion in the preceding 18 months, easily outpacing its growth to the $10 billion mark, which took nine-and-a-half years to achieve.

Vynokur recognises ETFs have changed the way investors access listed investments and this was also evident in the SMSF sector, which has been a strong supporter and user of exchange-traded products.

“ETFs have become associated with market-based broad exposures and have redefined what an index means for investors; with many now using them to access global markets or thematic investments,” he says.

“A case in point is that ETFs have become the primary vehicle to access ethical investments and we are seeing a high level of inflows being directed towards this category.

“ETFs have also helped move SMSFs away from the big four banks, Telstra and supermarkets in Australia and more toward global and thematic investments within their portfolios.”

He reveals global technology is an area of significant interest for SMSFs at present, with sub-themes related to global security, cloud computing and robotics all attracting their attention.

Despite this, the SMSF sector remains predominantly interested in Australian markets, which continue to be a core area of focus for funds using BetaShares to invest, but Vynokur acknowledges his firm’s breadth of ETF offerings is a drawcard.

“SMSFs are looking for growth and capital preservation, as well as values-based investing, and we have a broad range of solutions available because the market is heterogeneous,” he says.

“We are aware advisers are skilling up to meet these demands, as well the intergenerational change that is starting to take place in wealth management; and we want to help people invest across the generations.”

He adds that even after a decade in business there is still a need to provide education and communication around the basics of ETFs, but also around the more complex issues they can help address.

“People want to hear from trusted partners in times of volatility or when they are nervous about markets and their investments,” he says.

“We comment on events and reinforce with our adviser and investment clients for the need to stay the course and resist the urge to sell up and bunker down.

“Investors hurt their own prospects by letting emotions get in the way, which was why we addressed the COVID-19 relief measures and cautioned people last year about using superannuation as an ATM (automated teller machine).”

Residential property loans winner: LaTrobe Financial

Simplicity is the key

By Zoe Paterson

SMSF lending is a specialist area and trustees and their advisers must take care to ensure they achieve the best outcomes for fund members, according to La Trobe Financial chief lending officer Cory Bannister.

When providing residential property loans to SMSFs, Bannister says the main concern is to ensure trustees have been well advised and that the SMSF is appropriately structured.

“The most common mistakes we see relate to the timeline of events, which is a critical component to ensure there are no problems down the line,” he reveals.

La Trobe Financial recommends clients have an SMSF in place before they decide to buy residential property via a superannuation fund.

Further, Bannister says clients should check their lender’s policies relating to annual reviews, minimum SMSF size and liquidity requirements. “These are areas where a number of lenders have differing policies,” he notes.

La Trobe Financial was the residential loans category winner at the selfmanagedsuper CoreData SMSF Service Provider Awards 2021 and remains one of a limited number of organisations still serving the loans market for the sector.

The SMSF gearing sector has seen many of the major lenders exit in recent years, which Bannister attributes partly to the increased capital requirements imposed on institutions lending to self-managed funds through limited recourse borrowing arrangements, which are classified as ‘nonstandard’ mortgages.

“The exodus by the major banks from this important segment of the market is why non-banks like La Trobe Financial play such a critical role in ensuring this great option remains available for Australians planning their retirement,” he says.

“At La Trobe Financial, we maintain a strong conviction in this product based on its superior performance and the need to provide assistance to what has become an under-served market.”

La Trobe Financial has one of the broadest product ranges in the non-bank sector, offering SMSF loans for both residential and commercial property. The lender helps guide trustees and their advisers through the critical steps when buying residential property through their fund, from set up, through property purchase, contract of sale sign off, bare trust deed creation and settlement.

Bannister says all of the company’s products are designed to be user friendly.

“We try to keep things as simple and easy to understand as possible. While SMSF loans do have elements of complexity to them, we have done everything in our power to ensure our requirements are kept to an absolute minimum. We have engineered our forms, documents and processes to mirror those of our standard residential loan products so brokers and consumers immediately feel familiar,” he says.

“Also, having an experienced team on the road and in the office means that we can assist brokers and consumers by using a consultative approach from submission through to approval. Having direct access to the decision makers results in a much smoother end-to-end process and also ensures delivery of tailored solutions.

“It is also now well proven that using limited recourse borrowing arrangements to purchase property through an SMSF is a tax-effective strategy. It is an investment that people understand and seek, and it performs incredibly well without any of the systemic risks that were feared at the outset.

“To this end, we have plans to continue increasing our market share in this space.”

Australian shares winner: AUSIEX

Digitising to service the future

By Tia Thomas

The broad access to national and international share markets offered by SMSFs has enticed a higher number of younger Australians to set up their own superannuation fund, auguring well for AUSIEX, winner in the Australian shares category in the selfmanagedsuper CoreData SMSF Service Provider Awards 2021, according to chief executive Eric Blewitt.

AUSIEX began its involvement in the financial advice industry more than 25 years ago and has experienced an increased interest from younger people as a result of the diverse portfolio options, but despite this trend he acknowledges there has been a fall in fund establishments recently.

“More younger people are setting up SMSFs, but there has been a drop-off in establishment, confirmed by the latest ATO data. We too have experienced a drop-off in the last quarter to June this year compared to the last four years’ activity approximately,” Blewitt says.

“The reason is probably because they can access the market more broadly and there is a plethora of advisers recommending ETFs (exchange-traded funds). ETFs are starting to be used as a vehicle to access the markets that haven’t historically been easily accessible, whether that be debt products, international products, gold, commercial property, environmental, social and governmental stocks.

“People want access to tech stocks, which have great dominance in the US and other parts of the globe compared to Australia.”

To counter this trend and potentially take advantage of the increasing sector participation from a younger demographic, AUSIEX has begun to provide educational webinars and additional access programs, as well as taking measures to digitise many traditional application methods, he notes.

“The digitisation of the application process has been undertaken for SMSFs and their advisers wanting to set up share trading accounts. Nearly every SMSF that is set up has a trading account and it can provide the avenue for their exposure to equities,” he says.

However, the application process is not the only aspect of the AUSIEX business that has been electronically enhanced.

“One of two things that many financial advisory practices are highlighting is the challenges in tax file management, as well as corporate action management, and again all the paper registries,” Blewitt says.

“As such, being able to digitise corporate action management and tax file management is the key aspect AUSIEX is looking to invest in and deliver to advisers.”

He also accredits winning the award to AUSIEX’s strong client relationships.

“We have experience amassed over 20 years, we have a team that fully understands the adviser market and the needs of advisers. I’m sure that’s why many advisers voted us as the recipients of the Australian shares award,” he says.

Trust deed supplier winner: Cleardocs

Combining documentation and education

By Zoe Paterson

Trust deeds form the core of SMSFs. In conjunction with superannuation regulations, these critical legal documents establish the rules for starting up and operating a fund. They set out details ranging from the fund’s objectives, to who can become a member, and how benefits can be paid as a lump sum or income stream.

Getting the trust deed right is one of the first steps for trustees and fund members to achieving the best results possible from their SMSF.

Cleardocs assists SMSF trustees and their advisers to get their trust deeds and borrowing documents right from the outset by taking a plain language approach to documentation.

Customers are guided through the process of creating SMSF trust deeds and borrowing documents by completing an online question interface. The Cleardocs system automatically imports customer data and pre-populates part of the forms to speed up processes and make life easier for SMSF advisers and their clients.

Documents are stored online and can be accessed at any time, from anywhere in the world, without the need to install specific software.

SMSF trustees need to review their trust deeds on a regular basis to ensure they remain flexible enough to provide the control over their destiny that they desire, but are also compliant with all relevant rules and regulations.

Regulatory changes such as allowing a maximum of six members into a fund and requirements for SMSFs to use SuperStream for fund rollovers, as well as updates to contribution rules and pension payment requirements, need to be incorporated into the documents.

Cleardocs was established in 2002 and acquired by Thomson Reuters in 2011. The company works with top 20 Australian law firm Maddocks to ensure all of the documents it supplies are up to date with legislative and case law changes.

Thomson Reuters Asia and emerging markets managing director Jackie Rhodes says the market for providing SMSF trust deeds and associated documentation is becoming increasingly competitive and that the company is thrilled to win the selfmanagedsuper CoreData SMSF Service Provider Awards 2021 trust deed supplier category.

“Winning the adviser choice award in an increasingly competitive environment shows that both companies and individual advisers are choosing Cleardocs as their preferred supplier,” Rhodes says.

“The award reflects our obsession with supporting our customers through unmatched quality, ease of use and constant updating of information.

“Customers are seeing the benefit of our unique development program rollout and enjoying our enhanced online experience. We’re thrilled to be bringing our customers even greater versatility, with a wider range of integration options.”

In addition to its focus on making document creation processes as simple and efficient as possible, the business supports its 123,000 registered users in keeping up to date with relevant legal and regulatory changes. It provides educational materials and articles in the Insights section of its website, as well as resources SMSF advisers can use with their clients.

The business also offers a free legal helpline to support customers with queries about Cleardocs documents.