Practices reluctant to adopt automation and technology will struggle to remain competitive and "die a very slow death", according to an industry heavyweight.
Technology ‘laggards’ risking client relationships
The SMSF Academy’s managing director Aaron Dunn said using technology to improve efficiency and drive down costs is going to become increasingly important in coming years with SMSFs now attracting a younger demographic.
“The ATO statistics show around four in every 10 SMSF trustees are now under the age of 45,” said Mr Dunn.
“Pricing points will be a relatively important consideration for some of these younger trustees who are maybe starting with balances of less than what is the ordinarily the ASIC prescribed circa $200,000 amount.”
Mr Dunn said ‘laggards’ or slow adopters may be planning to rely on their relationships with clients.
“If their service is not priced competitively, [however], then there’s going to be some level of strain on the relationship,” he said.
While there is a lot of discussion in the SMSF industry about how automation and technology may drive down prices in certain activities such as compliance, Mr Dunn said technology is also going to enable practitioners to better understand what type of trustee demographic sit within their client base.
He said it will also help them understand what areas or clients they may want to target in the future, enabling them to access a “whole range of opportunities going forward in terms of what their value proposition is”.
Mr Dunn said there are certainly some pressures that the industry will confront with the big technology shift that’s happening in the industry.
“I think there are some real positives [though]; those who use it properly will better understand their clients into the future, and the type of clients they want and that will obviously leverage growth when properly utilised going forward,” he said.
In terms of the uptake of technology, Mr Dunn said he has already seen a difference between the administration providers versus general practitioners operating locally.
“The uptake of technology is far more prevalent amongst [the] SMSF administration community than amongst general practitioners,” he said.
“A lot of the resistance around security and so forth is starting to disappear; people are becoming more comfortable and a lot of the collaborative benefits are starting to come to the fore as well as the efficiencies that can improve workflow.”