Off­shore ‘ not cool’

Townsville Bulletin - - NEWS -

SEND­ING money off­shore was once the do­main of the clichéd rich busi­ness­man with ac­counts in the Cay­man Is­lands, but when or­di­nary Aus­tralians are pre­sented with the idea of their own fi­nan­cial data be­ing han­dled off­shore, they are far from com­fort­able.

A new sur­vey saw 93 per cent of Self Man­aged Su­per­an­nu­a­tion Fund trustees con­demn the prac­tices of ac­coun­tants send­ing work to off­shore sup­pli­ers.

The data re­leased by Su­per­fund Whole­sale found the neg­a­tive at­ti­tude to­wards “off­shoring” by ac­coun­tants and ad­vis­ers was driven largely by grave con­cerns about pri­vacy and se­cu­rity.

Su­per­fund Whole­sale also re­ported ex­pe­ri­enc­ing a re­cent spike in in­quiries around off­shoring, with 80 per cent of calls re­ceived from pro­fes­sion­als un­happy about ex­tra work be­ing cre­ated by in­stances of com­mu­ni­ca­tion break­down and high staff turnover at off­shore providers.

The type of work be­ing sent off­shore in­cluded ev­ery­thing from ad­min­is­tra­tion tasks to de­tailed fi­nan­cial and ac­count­ing work.

The prac­tice is le­gal as long as clients are in­formed, but at times the method of con­vey­ing that in­for­ma­tion left a lot to be de­sired, ac­cord­ing to Su­per­fund Whole­sale di­rec­tor Kris Kitto.

“Out­sourc­ing may be war­ranted for cer­tain tasks, when it comes to SMSFs it is un­nec­es­sary,” Mr Kitto said. “The ATO and the pro­fes­sional ac­count­ing bod­ies re­quire ac­coun­tants to in­form clients when their work is be­ing sent over­seas. How­ever, clients are of­ten obliv­i­ous to this prac­tice as dis­clo­sures are buried in the fine print of the en­gage­ment let­ter or agree­ment.”

Of the 560 trustees sur­veyed, 95 per cent said they would re­con­sider the ser­vices of­fered if they were ad­vised their per­sonal fi­nan­cial in­for­ma­tion would be sent off­shore, while 84 per cent were very likely to switch ac­coun­tants or ad­vis­ers.

These stated they would forgo any fee dis­counts in order to keep their per­sonal data in Aus­tralia.

“The per­cep­tion of clients is that out­sourc­ing their ac­count­ing work off­shore is not se­cure and per­cep­tion is king,” Mr Kitto said. “Out­sourc­ing off­shore can be sig­nif­i­cantly more com­plex com­pared with a busi­ness with all data stored lo­cally. Hav­ing the en­tirety of a clients’ SMSF work con­ducted in Aus­tralia is more ef­fi­cient when it comes to delivery, pro­duc­ing bet­ter re­sults with less fric­tion. Pric­ing is a ‘ hy­giene’ fac­tor only – it is only one part of the value equa­tion,”

The ma­jor­ity of re­spon­dents agreed gov­ern­ment agen­cies should be more in­volved in regulating off­shore out­sourc­ing, so that it is clear ex­actly who is han­dling their per­sonal fi­nan­cial in­for­ma­tion.

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