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Intentions to super switch is on the rise – good news for Accountants after the exemption expires (RG146)

I have recently been travelling around the country talking to accountants about the various solutions to deal with the accountant exemption expiry and the RG146 training required as a pre-requisite to obtain an authority. We are often asked the question – do I have enough SMSF clients to become authorised?

With the impending accounting exemption expiry I have sympathy for the smaller suburban accountant who have small numbers of SMSFs clients. However the question should not be how many have I got but how many can I get?

It will cost about $6000 pa to become authorised and this cost must be passed on to new clients. I meet some resistance on the topic of fee increases but, don’t forget, every accountant is in the same boat. Well almost.

A firm operating their own license has a much higher annual cost. Their PI alone will arrive at five figures and, as a consequence, they will need to increase their fee by a larger sum than the suburban office.

Finance wise also offers a complimentary ENewsletter which is regularly forwarded by us to an accounting firm’s clients. This ENewsletter covers a wide range of finance topics relevant to small businesses and families.

The following article by Tim Stewart of the Investor Magazine on Monday 12 October should be music to an accountants ears.

The number of Australians willing to switch superannuation providers is continuing to increase, with more than one-third of members willing to ditch their current provider, according to a new survey.

According to the third annual Financial Services Council/ING Direct Your Future Super Survey, 35 per cent of Australians say they would be likely to change their fund provider in the future.

This is up from 27 per cent in 2014’s Direct Your Future Survey, and 19 per cent in 2013.

The top reasons driving the increased likelihood of switching were a desire for lower fees (52 per cent), better performance and returns (52 per cent) and an easier switching process (34 per cent).

A majority (61 per cent) of the 1,236 respondents to the ING/FSC survey estimated they pay under $500 per year in superannuation fees, while 5 per cent said they pay “no fees”.

However, one in five estimated they pay more than $1,000 a year in fees – and this includes both single fund holders (23 per cent) and multiple fund holders (21 per cent).

The survey also found that 68 per cent of Australians selected an employer default fund as their main super fund.

When it comes to engagement with superannuation funds, 89 per cent of respondents said they check their super fund statements.

Around half of respondents claimed to be aware of how much they pay in fees (51 per cent) and 64 per cent of those surveyed claimed to know the balance of their fund.

Sixty-eight per cent of respondents said the performance of their super fund was “good” over the past 12 months.

Eighty-eight per cent of those surveyed said they supported the current super system, and 80 per cent supported an increase in the super guarantee to 12 per cent over the next decade.

So this should encourage firms with very low numbers of SMSF client to seek an authority to provide advice after the accounting exemption expires on July 1st, 2016.

A final note of caution: if the license solution you are seeking does not have web based software to automate the process then small firms would be advised to find another solution.

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