by Olivia Long

So, it seems I have a real job after all. For years I have been going to dinner parties and telling people I run a specialised SMSF administration business to be simply met with blank looks. What exactly does that involve? And, by the way, who won the footy?

Yes, I admit superannuation administration might not be a barbeque stopper of choice, but at least I can now say I belong to a profession, as highlighted by the Macquarie and SMSF Professionals’ Association of Australia 2014 SMSF Service Model Report, and, more importantly, it’s thriving. [The report is based on a survey of 292 SMSF service businesses across Australia.]

Make no mistake; this report puts to rest the notion that SMSF professionals are either financial planners or accountants, laying out a compelling argument for the emergence of a new profession. 

So what are its defining characteristics? In a nutshell, the report says they are small businesses – 62% have less than 100 SMSF clients and two out of three practices generate less than $1 million a year in revenue – with diverse business models. 

Some specialise, others provide a range of services, with the average practice offering about five distinct services that can include general insurance, estate planning and legal advice, administration and mortgage and broking advice. Although three out of four practices surveyed either had their roots in financial planning or accountancy, many have long since chosen to evolve through specialisation.

What I find interesting in the report is how their initial business focus is still shaping their destiny. For the accountancy firms that are now classified as SMSF service providers, they tend to be larger, more established and profitable businesses compared with those who started life as planners or administrators. The planners, however, are more likely to be diversified than their accounting compatriots.

Growth, too, is very much on the agenda. More than half the practices (58 per cent) say they are looking for new clients, partners or businesses, while only 13 per cent have the “for sale” sign out for all or part of their business. How they achieve growth varies. Word of mouth is still the most common way to attract new business (92 per cent), with the origins of each business playing a role in shaping its approach to marketing, with 82 per cent of financial planners using referrals from existing clients to bring new business through the door.

But the approaches of many practices are far more sophisticated and varied than just word of mouth or client referrals; for example, social media is used by half of SMSF administrators for client acquisition. 

That growth is in their sights is hardly surprising; according to the report, 68 per cent achieved revenue growth over the past 12 months. Looking further ahead, an overwhelming 84 per cent said they felt positive about the outlook for their business and 86 per cent are confident about the industry’s future. 

That this is happening in the market should surprise no one; as it’s often said, “do the maths”. There are now more than one million trustees or members of these funds, the number of funds stands at more than half a million, and the funds under management were around $540 billion – about a third of all superannuation assets, according to 31 March 2014 data.

The growth has been nothing short of staggering, and clearly underpins the growth of an SMSF profession which, according to all the evidence, is doing an admirable job. Let’s just hope the Financial System Inquiry agrees.