Almost a third of accountants and administrators are considering moving their portfolio administration to a cloud software solution within the next 12 months, to cut the time spent administering SMSFs and to boost their business growth.
The Class Digital Trends Survey, conducted by telephone and email in late Q4 of 2016, found 30% of respondents who were not using cloud software for portfolio administration said they were considering moving to the cloud within 12 months. The most common reason cited was to reduce the time and cost spent administering SMSFs, although a substantial proportion said their primary reason for moving to the cloud was to achieve scalable growth in their SMSF business.
The survey sought to better understand the growing adoption of cloud-based SMSF and portfolio accounting software, as the drive for greater efficiency and the ramping up of regulatory and reporting obligations force accountants and administrators to abandon traditional administration methods.
Non-SMSF portfolios further behind in cloud adoption
The survey also found that the administration of non-SMSF portfolios such as trusts and companies was still a heavily manual task for many accountants and well behind adoption of the cloud compared to SMSFs. While just 11% used manual methods like Excel to administer their clients’ SMSFs, a much larger percentage administered their non-SMSF portfolios manually.
The survey showed some administrators used generic accounting software packages to do some of the work in administering trusts and other non-SMSF structures, where assets are held beneficially. However, these aren’t designed to handle beneficiary accounting, where income distribution and tax implications are all important, so significant additional manual work is needed. They also can’t fulfil the reporting obligations placed on a trust, which are becoming increasingly important as the ATO steps up its scrutiny of these structures.
The Digital Trends Survey found a significant need among accountants and advisers for portfolio administration software for non-SMSF portfolios. Almost 30% say they administered at least 100 such portfolios and almost 1 in 10 manage more than 500 portfolios each.
Kevin Bungard | CEO, CLASS