With accountants requiring an Australian Financial Services licence (AFSL) to continue providing advice on the creation and management of SMSFs, the industry has been split into two camps: those licensed to continue providing SMSF advice and those unlicensed who no longer can.
There are nearly 600,000 SMSFs currently operating in Australia and that number is continuing to grow.
For AFS-licensed accountants, the opportunity to tap into this market has enormous upside but also presents a challenge, firstly for how to handle the increasing level of advice required and secondly how to ensure, for those looking to set up an SFMS, that it is the appropriate option for their retirement savings.
For accountants without an ASFL, this growing market represents a huge slice of the financial services pie that has been taken away.
The digital solution
The good news for both licensed and unlicensed accountants is that there is a solution.
The rise of robo-advice platforms like Ignition Wealth’s SMSF Advice Solutions, including the SMSF Appropriateness Guide, helps accountants continue to provide SMSF advice.
Ignition Wealth allows unlicensed accountants to refer clients to the platform, which offers SMSF advice under the Ignition Wealth AFSL, providing clients, personalised management advice while you maintain the relationship. For licensed accountants, this allows you to automate part of their advice process.
The Ignition Wealth SMSF Appropriateness Guide in particular offers a personalised assessment for every client looking to set up an SMSF to establish whether it is the most appropriate retirement saving strategy based on their circumstances and goals.
This opens up the opportunity for all accountants to offer SMSF advice at scale through an automated system.
Importantly, this eliminates the time burden of face-to-face meetings with every SMSF client to advise on managing their fund. A digital advice platform puts the control in their hands, allowing them to set up and manage the fund at their own pace and receive advice tailored to their goals and life circumstances.
All the while, you, their trusted adviser, maintain complete visibility and control over the client relationship ensuring you remain the trusted adviser.
Ensuring appropriateness for clients
With this increased scale of advice, the importance of making sure an SMSF presents the best option for a client’s retirement saving goals becomes even greater.
If you are considering a digital SMSF advice solution, make sure it offers a self-guided assessment for the client on the appropriateness of creating an SMSF.
This should establish the client’s financial position, their financial goals and provide guidance on their responsibilities and obligations as an SMSF trustee. Based on this information, a recommendation can be made on whether an SMSF is appropriate for the client or not, either by you if you’re licensed or by Ignition Wealth, if you’re unlicensed.
With increasing scrutiny from ASIC on the SMSF sector, it is critical that you can demonstrate all SMSFs on your books align with the trustees’ financial situation, goals and life circumstances.
How to find the right digital SMSF solution?
To be confident that an automated SMSF solution will offer compliance and high-value advice support, look for one that offers;
- Compliance at the forefront, including correct licensing for the level of advice you provide (limited, complex, etc.)
- Licensing to offer advice under the provider’s AFSL
- Compatibility with your current accounting software
- Cost effectiveness based on functionality, ease of use and level of risk management
- Education for clients on running an SMSF to ensure they understand their obligations
- Engagement for clients to help understand the connection between their super, broader investment portfolio and their financial future
- Financial modelling and scenarios
- In-person advice
- Bank-grade security
- Experience in the digital advice and superannuation space
Download the free eBook: The Accountants’ Guide to SMSF Compliance to help you navigate the SMSF compliance maze.