Minister asserts potential of fintech to boost SMSF sector

The assistant Minister for Superannuation, Financial Services and Financial Technology, Jane Hume, has highlighted the potential for financial technology to boost the cost-efficiency of SMSFs and grow the sector as a result.

In an address to the SMSF Association Conference on the Gold Coast yesterday, Senator Hume said there had been a bit of heated discussion about the account balance that is required to make an SMSF a cost-efficient option.

She cited a finding from the Productivity Commission that SMSFs with balances under $500,000 delivered lower returns than larger ones and that smaller funds had significantly higher costs.

“However, putting on my other hat as Australia’s first minister for fintech, I am very pleased to say that there have been some significant developments in technology that have been driving costs down and will continue to do so,” she told delegates.

“This is a really exciting development. It’s a virtuous circle and it’s clear in this sector than any other of the super system.

“The larger the SMSF sector becomes, the more fintech firms see a ready market and an appetite for their services. Fintech solutions lower the administration, lower the costs and, of course, more people are attracted to the sector and the bigger the sector becomes.”

Fintech solutions about more than investment reporting

Senator Hume said many fintech solutions in the market now focus equally on the SMSF intermediaries such as accountants, advisers, administrators, auditors and lawyers. For example, she pointed to regtech solutions that improve data feeds while removing the need for an “endless amount of paper and documentary evidence”.

Further, she said the best fintech solutions are about more than investment reporting which she believed was “probably the easiest aspect to automate”.

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Source: Minister asserts potential of fintech to boost SMSF sector – SMSF Adviser