SMSF Clients Need Your Advice

Self managed super funds are Australia’s fastest growing superannuation sector and they are hungry for more advice, according to a recent report from the SMSFAssociation and CommBank. The report revealed that 19% of SMSFs don't have an adviser and that manySMSFs are after more support (50% of advised SMSFs and 59% of unadvisedSMSFs). Figures showed personal recommendations drive trust with 41% of advised SMSFs saying they found their adviser via recommendation from friends or relatives. This is great for brokers already in theSMSF space but what about those looking to include it in their service offering but haven’t yet taken the step? Speaking to MPA, Liberty Financial’s group sales manager, John Mohnacheff said for brokers who are perhaps hesitant to explore theSMSF space, they first need to stop thinking that SMSF lending is harder than other forms of lending. “As long as they partner with the right lender, SMSF lending can be clear, straightforward and highly valued by customers,” he said. “Then brokers should look to establish good relationships with partners that can provide lending referrals. Being able to offer SMSF lending can be a real differentiator when it comes to setting up these partnerships. “Liberty’s simple approach to SMSF lending reduces costs and eliminates stress. Once a financial planner has been engaged and a bare trust established, we can work with the client and their financial adviser to set up the SMSF loan, meaning more satisfied customers.” La Trobe Financial’s VP chief lending officer, Cory Bannister, told MPA any broker can delve into the SMSF space if they are willing to undertake the training involved. “Whilst it is technical, it is not overly difficult once you are across the specific product particulars and the requirements under the SIS Act,” he said. “SMSF lending is a niche area, and should only be carried out by brokers looking to deal regularly in this space, it is not suited to brokers who only want to process 1 or 2 loans they come across each year. So whilst it is not essential to be a SMSF “specialist”, it should be left to capable and educated brokers who are not foreign to this type of transaction.” Bannister said when looking for leads, a broker’s existing database should be their first stop, looking for clients who are self-employed and renting their business premises. “It can often make good commercial sense for small business owners to purchase their business premises as they can use cash flows from their business to pay their mortgage, as opposed to paying someone else’s by way of rent.” When it comes to new clients, Bannister says brokers can reach out to their network of accountants and financial planners for leads. “Accountants and financial planners are by far the best form of referral source for brokers, as brokers can take comfort in knowing that the clients have been qualified and deemed appropriate to undertake borrowings via this structure. “In terms of selecting a lender, partner with someone who can provide hands-on assistance and guidance. Like all of our products, at La Trobe Financial we make them broker friendly. Our forms and processes are consistent across our full product suite including SMSF loans, therefore if a broker has written a residential or commercial loan with us, they can write aSMSF loan as well without having to learn additional processes or undertake separate accreditation training.”

Maya Breen

MPA Magazine

29 May 2017

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