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Wrap up of the 2011 SPAA National Conference
I attended the 2011 SPAA National Conference in Brisbane last week. Over 1140 delegates attended, the largest SMSF industry yet! It was quite amazing to think only six weeks earlier, the conference centre was under water.
With the future of the financial services industry changing, there was a focus of plenary sessions around the topics of fiduciary duty and Future of Financial Advice Reforms (FoFA). The FoFA panel session was a highlight with views shared from both sides of government, ASIC, industry bodies and listed financial services entities.
The conference is littered with technical sessions and updates on legislation changes. The burning issue continued to be with excess contributions tax. Jemma Sanderson presented an excellent plenary session on the practical issues in dealing with ECT assessments and strategies to consider when confronting excessive contributions. The other ‘hot topic’ continues to be limited recourse borrowing, where Dan Butler presented a concise update of the legislative changes and emerging issues of these arrangements.
Finally, the growing need and demand for greater education of SMSF trustees has seen SPAA introduce a new trustee education standard. A session covering these new requirements was a great opportunity to promote the SMSF Academy as only 1 of 2 accredited trustee service providers currently within Australia having achieved this standard.
Andrew Daddo as MC was a welcome addition and added some great humour to the conference. The Praemium casino night was the social highlight and provided the attendees with the ability to enjoy a bet, a drink and networking with colleagues and friends.
The SPAA conference continues to be the premier event for SMSF service providers in Australia. It provides a great opportunity to network with your peers and form great business relationships from like-minded professionals.
If you missed it, make sure you are there in 2012!!
Author: Aaron Dunn - The SMSF Academy
Data integration in the context of SMSF industry integration
(click image to zoom)
Our valued blog contributor and SMSF specialist Aaron Dunn very recently published an excellent overview of the SMSF industry in his highly respected SMSF blog www.thedunnthing.com. His chart depicts various categories with its major players. What the chart doesn’t show is the dataflow between the players.
This blog post discusses elements of the transactional dataflow between SMSF industry players.
Network thinking is not prevalent in the SMSF industry
For years “straight-through processing” has been a catchword in the Financial Services Industry. While a lot has been achieved over the years, the SMSF industry players and adjacent data generating industries are not thinking and acting in networks (yet). Too many entities still think they can do it all themselves and leave their Accounting and Advice clients alone with barely integrated compliance solutions (aka accounting software) and a few data feeds. What is missing is true network thinking and acting and using web-services technology which is readily available today but unfortunately not used enough. The industry is stuck with on-premise accounting software and vendors who try to bolt on web features to their existing products; some being more successful than others, though.
RSDataWeb, the “Switzerland” of accounting and advice systems
At RewardSuper we’ve understood that the Internet has dawned on the SMSF industry and that network thinking and acting are the way to make it stick. Not only web services technology but the willingness to actively exchange data electronically without manual intervention is the way forward. With our RSDataWeb solution, we are at the bleeding edge of this new technology adoption. We team up with forward thinking companies in the industry to automatically hook up client authorized data streams such as share trading data, and feeding the resulting cleaned and fully matched data into the compliance systems of choice, such as BGL Simple Fund, Acurity, superMate and others. In the industry we are all in this together with trying to deliver the best possible data as quickly as possible and untampered by manual interventions into the books of SMSFs (i.e. trial balances).
Integrating the SMSF accounting data value chain
The key to data integration and resulting high data quality is for the players in the data value chain to let their systems talk to each other across all process steps. No manual interventions such as keying in contract notes data into compliance software, which represent broken links in the data flow (see picture). While the process flow should be automatic to represent true integration, there needs to be ongoing control of the process by the process owners. In the example of an SMSF conducting share trades, there are three types of owners: trustees, who decide and effect trades, stock brokers, who execute trades on behalf of the trustees, and accountants, who also act on behalf of the trustees by making sure that the trades are correctly represented in the SMFS's books.
The example process has two integration points
(1) The broker’s order system automatically produces trade confirmations (aka contract notes) for their clients, the trustees. With RSDataWeb the contract notes are automatically picked up and reconciled with the cash book.
(2) RSDataWeb automatically codes all reconciled transactions and delivers them to the respective accounting system.
Both integration points need to be carefully monitored by the accountants (via automatically produced exception reports), who are in control of the process from step 3 onwards. An automated, integrated and well controlled process delivers the results, which the trustees the Auditors and the SMSF regulator rightfully expect to see.
Author: Wolf Schumacher
Is the cost of doing SMSF administration stacking up for your business?
Self-Managed Super Funds are an interesting conundrum for many of the 15,500* accountants acting as administrators and/or tax agents. For practitioners, many of their business advisory clients now operate SMSFs. However, this super fund work has always been a challenge as to “why aren’t we making money on undertaking this work for our valued clients”? It is not uncommon to see write-offs in the vicinity of 20 – 40% or more…
I’ve had many discussions over the past 2-3 years with small to mid-sized accounting businesses that are spending anywhere between 60 – 80% of the annual continuing professional development (CPD) budget on keeping up to date with changing superannuation laws on an area that accounts for somewhere between 10 – 20 % of their total business revenue. As accountants, surely even they realise that these numbers don’t add up!! But for many, they will continue on this path as a “loss leader” due to the larger component of business advisory work with their clients.
Well, what if I told you that it doesn’t have to be this way…
I have outlined below a few industry trends that I have followed closely in the past few years:
· Embracing technology – there have been significant advancements in the use of technology to capture and process data for SMSFs; from bank account transactions, share trades and wrap account data feeds. Many of these are available in web-services feeds now, with further automates the accounting process. It needs some time to invest in training to get it right, but the rewards can be substantial. I have seen first-hand, time savings of 40 – 60% for a typical SMSF with cash, shares and managed funds.
· Creating a specialist SMSF division within your practice – many firms recognised the growth occurring within the SMSF industry and have carved a niche market to expand their business revenues through SMSFs. Having specialist expertise not only focuses on process improvement (profitability), but also creates further value-add advice work across both accounting and financial planning.
· Outsourcing – for some businesses, they have actually worked out that it is all just too hard… they have decided to outsource the SMSF component of their client’s work, but retain control of the relationship. Specialist SMSF service providers have definitely arrived within the SMSF space and will continue to grow as the industry matures and they look for greater scale.
Therefore you need to ask yourself… if your business is serious about self-managed super fund work, how will you embrace change to drive revenues and profitability for your business?
* As stated in the SMSF statistical summary issued by the Super System Review Panel, 10 December 2009
Author: Aaron Dunn, www.TheSMSFAcademy.com.au. www.twitter.com/TheDunnThing
