A mid-tier accounting firm has predicted the probability of SMSF administration costs rising due to the complexity resulting from the implementation of indexation is low.
“I think most administrators will try and deal with [the implementation of indexation] internally,” HLB Mann Judd Sydney wealth management partner Michael Hutton said.
Hutton revealed this is definitely the approach his firm is taking in this instance.
“The attitude we’ve had generally is to try and build in the complication to existing fee levels. [That means] trying not to pass it onto the client [but making] our systems better to deal with these [changes],” he noted.
According to Hutton, the firm’s clients would not be expecting any change to the existing administration agreement because they are unlikely to be aware of the change to the superannuation system.
“To be fair, I don’t think any clients would be aware of when these extra complications arise,” he said.
“We haven’t had a lot of feedback from clients on that [issue].”
He noted constant changes to the system, such as the introduction of indexation and the method by which it will be implemented, continue to make servicing SMSF clients increasingly more complicated for both advisers and fund administrators.
With regard to the legislation increasing the allowable maximum number of members in an SMSF from four to six people, Hutton admitted he was yet to determine the effect it will have on the firm’s existing client base.
“I think there will be a bit of an uptake in the six-member fund [legal amendment] but I haven’t really thought through how many examples we would have in here of that,” he said.
Nevertheless, he acknowledged it will be of benefit.
“I think it will make [SMSFs being the family super fund] a bit more flexible with retaining family wealth in the superannuation environment,” he said.
“When people die, their super has to be paid out, but if money can be rearranged in the super fund [so it can] stay within the super environment, then that could be helpful for some families.”''