The growth story of self-managed super funds has captured a lot of attention across the financial services industry. The projected growth of the SMSF sector has been validated by industry research. However, the changing demographic of new SMSF entrants and the behaviours of ‘why’ the shift towards SMSFs, demands the attention of all SMSF professionals.
According to ATO statistics, around 40% of new entrants to the SMSF sector are members under the age of 45. This growth in new entrants is distinctly different to the overall age demographics of the sector, which is skewed heavily in favour of the retiree and pre-retiree segments. These vastly different demographics and trustee-types are also seeing the beginnings of different business models by service-providers within the industry.
While you may have enjoyed business growth in the past, simply due to the rising popularity in SMSFs and your decision to specialise in the sector, specialisation in itself will not guarantee your ongoing success. To ensure ongoing success, professionals operating in the SMSF sector need to create a dedicated SMSF business plan and understand how to grow a business within an increasingly competitive marketplace.
In order to achieve this, you’ll need to identify where your business currently sits. Is your business focusing on the:
- growing nature of self-directed (or coach-seekers) trustees
- ‘outsourcers’ – those who seek a range of advice, administration and compliance support
- (maybe) all of the above.
It is becoming very apparent that without a clearly articulated value proposition to suit the various SMSF trustee-types and life stages, your opportunity for SMSF growth will likely fall short of your business expectations.
So what should you be doing in building the foundations of your SMSF business plan? Here’s a couple of important questions you should consider:
- What do you know about your existing SMSF client base? Have you undertaken any segmentation by age demographic and/or trustee-type? Has this process addressed any ‘gaps’ or opportunities in your service offering to engage with trustees throughout the various stages of the SMSF life-cycle?
- What research have you undertaken about key trustee behaviours and the areas of interest with SMSFs that are driving growth in the sector – how is your business responding to these opportunities? And what strategies should you start to think about employing?
The success of your SMSF business plan starts with building some important foundations. Having a clear understanding of your existing SMSFs, new entrants and your target audience, will help you to develop where you want to go and how you are going to get there. It’s an exciting opportunity – make sure you give yourself every opportunity to capitalise.
Aaron is a leading SMSF industry expert and blogger. He is also the managing director of The SMSF Academy.
