Recent industry research performed by Investment Trends has shown compliance is now the biggest challenge financial planners face when servicing their SMSF clients.
The Vanguard/Investment Trends "April 2014 Self Managed Super Fund Report" revealed 35 per cent of respondents cited compliance as the item they found most difficult to address when looking after the SMSF market.
The result reflects a significant change in the issues troubling SMSF trustees as 43 per cent of participants nominated dealing with the fall in concessional contributions caps as the biggest challenge in 2013.
This year though only 19 per cent of those surveyed admitted managing the contributions limits was their biggest advice headache.
The issue of having to deal with clients who had an SMSF set up for them by an accountant when they were unsuitable for the retirement savings structure still ranked high, with 32 per cent of planners citing it as a problem.
However, the significance of this issue had also receded, with 42 per cent of advisers considering this a major challenge in 2013.
“Previously a lot of financial planners were struggling with things like falls in concessional contributions caps and regulatory uncertainty, but now the challenges they’re facing is really concentrated around compliance, admin and dealing with clients who have had an accountant set up an SMSF for them when it wasn’t suitable,” Investment Trends senior analyst Recep Peker said.
He noted those planners identifying having to rectify fund establishments performed by accountants tended to be practitioners whose practices were not generating a solid amount of revenue from SMSFs, whereas those advisers struggling with the administration of funds were doing so because the number of new SMSF clients they were attracting was becoming more and more significant.
In regard to fund administration, 30 per cent of those surveyed said that was their biggest challenge.
The report was based on an online survey conducted over March and April. Responses were received from 251 financial planners servicing the SMSF sector.