Three ways technology can optimise SMSF advice

Price and costs are just one set of considerations. It’s equally, if not more critical, to opt for proven and reliable solutions which keep pace with innovation and are closely aligned to the practice’s requirements. The payback for adopting these principles can be significant.

Below are three key ways leading technology can optimise SMSF advice:

1. Data

Quality, accurate and timely data is an obvious necessity to meet the strict regulatory and compliance requirements and tax obligations that apply to SMSF trustees and their advisers. However when it’s captured, maintained and enriched, it offers a lot more value to the practice.

Leading platforms allow advisers to better structure, cleanse and data mine information that can pinpoint client and investment trends, identify risks, and deliver valuable insights to help advisers underscore their value to clients. They offer high configurability, which helps ensure these platforms to align to the practice’s business processes and the ability to seamlessly interface with other platforms to produce clean, complete, accurate and usable data. Naturally, data is a critical ingredient for advisers looking to fully leverage next generation technologies such as AI and Robotic Process Automation (RPA) to supercharge operational efficiency.

Recent AUSIEX data, for example, highlighted the benefit that advisers can provide to SMSF clients with regular portfolio reviews. The analysis from 2023 showed advised SMSF clients have greater exposure to the largest companies by market capitalisation and traded more regularly, while their unadvised peers traded a more diverse number of securities and traded less, exhibiting what seems to be a relatively more passive ‘buy and hold’ approach.

Generally speaking, we have also found that SMSFs managed by an investment adviser are more diversified across asset classes, strategies and sectors, and have a stronger preference for ETFs than their self-directed peers. This example serves only to exhibit that data, when structured well and maintained, can be a powerful boost when it comes to ‘knowing your customer’ and therefore how to deliver value to them. Further insights will be available in our upcoming SMSF analysis released shortly.

2. Trading efficiency

Trading expertise and efficiency is a core requirement for modern advisers and technological innovation is a driver that can produce better outcomes for clients and the practice. Bulk orders which aggregate client trades for efficiency, for example, can be placed as so-called ‘icebergs’ which break large orders into smaller components that are traded one-by-one, while the others remain hidden to avoid alerting the market to the total size of the order, and to ensure the price doesn’t divert too much from the target. Brokers such as AUSIEX can also use algorithmic trading on a client’s behalf or assist advisers who wish to place directly into the dark markets provided by ASX (ASX Centre Point) or Cboe (Cboe Mid-Point).

Strong, deep and robust integrations between modules within platforms and to other systems in the modern adviser tech stack, enables advisers to monitor markets closely, use a variety of order types to trade different asset classes, such as international equities, on different exchanges and achieve target prices. It will also give them access to capital raisings, initial public offerings (IPOs) and other instruments which add value to clients’ portfolios while at all times ensuring strong transparency over security and portfolio performance.

AUSIEX for example, makes it easy for SMSF advisers to diversify their clients’ portfolios through their recently announced International Markets platform which will offer a range of trading, news, alerts, and reporting features to help advisers access and manage their clients’ overseas exposures. Advisers can trade using simple and advanced order types including conditional orders and choose from different order duration options to execute buy and sell orders with precision.

Since the pandemic, the demand for full access to direct international shares has expanded and for an SMSF adviser who has clients wanting and/or needing that exposure, having that access is critical to their value proposition.

3. Intergenerational wealth transfer

SMSF advisers, if not already, will soon be dealing with the heirs of the Baby Boomers and will need the right technology stack to service the digitally-savvy younger generation who have high expectations of being able to access and control data and information. This clearly includes a focus on user-friendly mobile platform solutions and the potential adoption of tools based on artificial intelligence. Growing expectations from end users with respect to cybersecurity are also likely to change the way in which customers are served in future and how data is accessed and protected. First-class platforms ensure these protections are in-built. Powerful reporting capabilities such as AUSIEX’s Portfolio Reporting Services, help keep stakeholders fully informed. Best-of-breed technology built on open architecture principles also allows more seamless connectivity with other platforms and maximise the efficiency and convenience for SMSF advisers and their clients.

The next generation of SMSF trustees and beneficiaries of the wealth transfer are likely to prefer different communication channels to their elders, so product providers must adapt towards an omnichannel approach, incorporating tools such as webchat and mobile notifications to complement more traditional digital and non-digital channels. This is also a factor for users as we see younger advisers entering the industry who similarly value an omnichannel approach to engaging with clients.

With the plethora of technology solutions available currently, technology selection is often an extremely challenging and highly impactful decision, no matter the size of the practice. Beyond the feature set, it’s important to seek strong and robust partners with a demonstrated track record of innovation and success in meeting client demand and who can also claim strong balance sheets themselves. This will give dealer groups and advisers greater surety that a provider will continue to be able to profitably service their clients and capture the value of those efficiencies into the future.

They say price is only an issue in the absence of value. This certainly applies to the technology case as the tools available to financial advisers today, allow them to focus on servicing clients with the advice and guidance that achieves optimal outcomes.

For more information about AUSIEX, go to www.ausiex.com.au

Chris Hill is the National Manager of Strategic Relationships with AUSIEX and has been with the business since 2007 through its various iterations. Starting as a Business Development Manager, Chris has held several roles including Strategic Account Manager and State Manager of Queensland where he focused on providing ongoing and viable partnerships between AUSIEX and its new and existing Financial Planning and Stockbroking clients. In his current role, Chris is responsible for the management of AUSIEX’s Strategic Relationships, including large Dealer Groups, Institutional and Business to Business and strategic vendor partnerships. Chris’ role also has oversight of all of AUSIEX’s service and relationship management teams. Chris holds a Masters in Applied Finance, a Bachelor of Management, a Diploma in Financial Services and is a Master Practitioner Member of the Stockbroker and Investment Adviser Institute of Australia.