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SMSF advice drives practice value

Incorporating self-managed superannuation fund services into a financial advice practice may see its business valuation return to pre-GFC levels, according to an industry consultant.

Nakodo director Michael Drage told the AIOFP conference in Cambodia last week that financial planning practice principals cannot afford to rule out jumping on the SMSF bandwagon, saying he is “amazed” at the number of financial advisers not qualified to provide SMSF advice.

“If you want to be in the retirement advice game and you don’t do SMSFs, get out,” Mr Drage said. “That is where all the money is going. In the last quarter of last year, money was getting rolled out of every sector except self-managed super, and industry funds and retail funds are now all scrambling to provide solutions that might stem this massive leakage.”

In addition, Mr Drage – who headed up Perpetual’s SMSF business in the late 1990s – said adding SMSFs into a firm’s repertoire may help alleviate the trend of falling financial advice practice values since the global financial crisis.

“From 2008 to 2013 the average financial advisory business lost 2.5 per cent per annum in revenue – not all businesses experienced that, but this has been the average,” he explained. “The super industry by contrast actually went up by 21 per cent and largely that can be attributed to the SMSF sector.”

Mr Drage projected a 6 per cent per annum growth rate for firms focusing on the rapidly growing SMSF space, which would see some firms return to 2007 growth and profitability rates.

Those advice firms that currently do not offer any SMSF advice services may find that the learning required to become specialised in SMSFs may also engender additional “business efficiencies”, Mr Drage said. 


At the AFA conference in October last year, AMP SMSF head of policy and technical Peter Burgess suggested that SMSF advice can be a key factor in client retention.

“If you’re not talking about SMSFs, someone else is,” Mr Burgess said

“I’m not suggesting pushing all of your clients who are getting close to retirement into SMSFs, but the point is you have to have enough knowledge and information about SMSFs to have an informed discussion with your clients because … they want to have that discussion."