Advisers struggle with untapped SMSF market

The demand for self-managed superannuation fund advice has stagnated over the last decade, while overall satisfaction with financial planners has declined to a seven-year low.

This is according to Vanguard and Investment Trends' March 2019 SMSF Report, which found the number of SMSFs have skyrocketed disproportionately to the financial advice rendered to this cohort between 2009 and 2019.

The number of SMSFs jumped 77% from 335,000 to 595,000 over the period. SMSFs that use financial planners however, have remained steady at an average of 209,000.

One third (32%) of the 4927 SMSF trustees surveyed said they do not seek financial planners because of the lack of confidence in the adviser's expertise. Paying adviser fees was the next main barrier (30%).

But many of the 268 SMSF financial planners canvassed were optimistic about growing their SMSF offering over the next three years (36%).

Interestingly, the report found there is largely an untapped market for SMSF advice, as members indicated their struggles with different aspects of investment strategies - a gap which advisers can meet.

Vanguard Australia head of intermediary Rebecca Pope said this year's report showed the ongoing challenge for advisers to find and retain new SMSF clients.

For years, the research has highlighted the areas of unmet advice for SMSF trustees, she said.

Pension strategies, estate planning and identifying undervalued assets were the top areas SMSF members grappled with. Tax planning, investment strategy and asset protection for share market falls were also difficult areas to navigate on their own.

"The report also provided some insights for advisers into SMSF trustees' attitude to alternative forms advice, with more than half saying they would consider over the phone or advice via web chat if it would reduce the cost of the advice service," Pope said.

SMSF members spend eight hours in total per month on their portfolio, which is split into: selecting and researching investments (3.3hrs), keeping on top of regulation (1.1hrs), ongoing monitoring or reporting (2hrs) and administration (1.7hrs).

Read more: SMSFVanguard Australia
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