The outsourcing of self-managed superannuation fund (SMSF) administration services to overseas providers has yet to yield significant cost savings and instead has presented some practical issues, according to a leading accounting firm.
“It’s still very disparate. There are a lot of providers out there but we still haven’t seen any savings from these arrangements,” HLB Mann Judd superannuation director Andrew Yee said.
In a more worrying development, other problematic issues have surfaced through the use of these providers.
“We’ve heard about some disaster stories as well,” HLB Mann Judd head of wealth management Michael Hutton said.
“They’ve mainly been communications issues. Say, they’ve sent the administration off to India, for example, and the information has come back where they’ve had to re-key everything and it just hasn’t been helpful,” he explained.
“If something comes back wrong it’s almost worse than if you’d started from scratch yourself.”
Hutton anticipates the mood of the SMSF sector will trend away from these types of arrangements as the technology associated with the administration function of these funds develops further.
“I think with the improved technology the push will be to actually do more onshore work than offshore. If you can reduce the individual data entry it’ll make it all a lot more efficient,” he said.
