Opinion / Professionals / SMSF

INFOGRAPHIC: 10 predictions for the future of the SMSF Industry

Ok, I’m going to be bold… well, not too bold but bold enough to put together 10 prediction for the future of the SMSF industry from what I’m observing in key trends, challenges and opportunities with the SMSF sector.

The landscape of the SMSF sector is rapidly changing – from the age demographic of new SMSF entrants, to the way in which trustees seek advice; the impact of technology and how business models are changing to adapt┬áto greater levels of specialisation.

I have put together the infographic below which outlines my 10 predictions for the SMSF industry.  Some of these predictions are well on their way to becoming reality, some may never come to fruition.

The purpose of this is to get professionals thinking about the way in which we are seeing rapid change in the industry and to understand what you need to be thinking about in your SMSF business model and how you provide services to SMSF trustee.

What do you think about the 10 predictions for the future of the SMSF industry?

I’d love to hear your feedback about my predictions and any thoughts that you may have yourself about where the industry is heading?



6 thoughts on “INFOGRAPHIC: 10 predictions for the future of the SMSF Industry

  1. Compliance costs will drop by far more than 30%. There is one mob, Mclowd, that has a cloud based model with zero costs for annual administration, leaving the audit as a cost item. Due to their business model an audit can be less than $300.

    Will this be suitable for all SMSF – hell no. But probably well over 90% could use this or similar. Compared to current costs of admin and audit which can be several $000’s.

    I would expect one of the big players to get involved with this business model in the not too distant future. And once you have the admin, then is becomes a source of on-selling limited advice, especially strategic.

    Traditional FP will be in an ever increasing profit reduction situation, unless they harness the new business models. How many farriers did each town have 100 years ago?

    • Hi Colin,

      Thanks for your comments. Yes, I’m aware of McLowd’s business model. It’s revenue from what I understand will come from a split from service providers utilised in their marketplace, so whilst the software is free, this doesn’t mean trustees will obtain free administration and compliance. In saying that though, it clearly demonstrates what different models are available in the sector and to another point I made – globalisation will become more common. If you look in the marketplace on McLowd there are already a range of administrators beyond Australia offering low cost solutions.

      Let’s just say its making for interesting times…


  2. Good work putting the infographic together Aaron. Overall I agree with the trends you have illustrated – some are predictive, others are happening now.

    One thing slowing the speed of these trends however is the inability / unwillingness of traditional accounting practitioners to look at the SMSF services they are providing objectively and see whether they have a future. Unfortunately these same practitioners will wake up in a few years and realise it is too late – they haven’t upskilled and re-engineered their business model to deliver the services and advice clients really want.

    The comments on Mclowd are relevant – but I think Colin misses the mark slightly – Mclowd is a SMSF admin platform provided for free, that either a SMSF trustee can use directly, or more likely engage a contractor (typically in a low wage offshore location) to do the bookkeeping / accounts for them. Only a small number of SMSF trustees are true ‘DIY-ers’ (spreadsheet jockeys) – and approximately 0% of people set up a SMSF as they enjoy doing the admin / compliance aspect!

    As Aaron illustrates, in the future SMSF compliance will ‘just happen’ – and SMSF professionals will earn their keep by educating trustees, providing expert value added (packaged?) advice and being a coach / trusted advisor.

    Personally, these 10 trends provide me with relief as I know that the SMSF businesses I operate are ahead of the game.

    • Kris.

      ‘Mclowd is a SMSF admin platform provided for free, that either a SMSF trustee can use directly, or more likely engage a contractor (typically in a low wage offshore location) to do the bookkeeping / accounts for them’

      A very valid point. However there is also a move to automation of the ‘bookkeeping’ with automatic data feed from banks / brokers et al. The best example of this is eSuper admin service. It is restricted to banks / brokerages that they have agreements with and of course there is still some data that the trustee has to enter but they would have to record said data anyway even if to give to an accountant etc.

      When the Mclowds of this world, and I would expect one of the large banks / insurance companies to get involved very soon, obtain data feed agreements then for a large % of ‘simple’ SMSFs the admin will be zero cost. And with a competitive audit system the total costs are dramatically reduced.

      This should (?) increase the viability of creating and running a SMSF with somewhat lower balances. I leave it to others as to whether this is a desirable outcome or not!

      The big win for the new wave of low cost admin services is the ‘control’ of the client base. Once you have the admin it is a far easier sell to do the audit, insurance, and advice. The start, or continuation, of the industrialization of the sector.

  3. Hi Kris,

    Thanks for your comments and retweet! I agree with you about the traditionally slow adoption of technology within the SMSF sector and with the fast-pace of change at the moment, we could quite quickly see a gulf in costs between those that use technology and those that don’t.

    Globalisation is already alive and well in the sector, with 7 or more countries already providing BPO services to the SMSF sector, but most of these aren’t operating an ‘admin’ solution for accountants, but rather a year-end compliance offering. You wonder when this may change? if at all?

    It makes for interesting times…


  4. Aaron

    I agree with your 2nd prediction…

    Just updating your readers on cloud auditing – http://www.onlinesmsfaudit.com.au – Australia’s first cloud auditing tool is being used by over 300 SMSF auditors since its launch on 16th September 2013 – over 800 audits have been completed on this cloud software.

    Everyday more than 5 SMSF auditors are joining and about 20 audits are being completed.

    Our marketing has shown about 2000 SMSF auditors will use this cloud tool only to audit funds within 5 years to audit more than 100,000 funds.

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