SBS created an off-shore solution for a top administrator of Australian self-managed Superannuation funds. The India-based back office now works in close concert with Australia, and has supported rapid growth, while delivering 200+% productivity gains.
Situation
The client is one of Australia’s largest administrators of personal pension funds (“self managed Superannuation funds”), servicing over 750+ clients. The client has a proven track record and strong systems in place.
Challenge
Small personalized retirement funds account for 40% of the $741 billion Australian retirement funds market, and are growing rapidly. Self-managed Superannuation Funds (SMSFs) are complex personal funds, falling under multiple tax and pension regulations. These funds are typically created by high net worth individuals, and handle a variety of complex investments ranging from stocks and bonds to art and furniture.
Despite this, SMSFs are typically only a marginally profitable area for administrators. And graduate accountant employees often find SMSF accounting an unattractive option (“time consuming and boring”). At the same time, training and experience are critical, since the process involves significant administrative work due to unique needs of funds, changing legal environment and IT system limitations.
The client had a challenge in growing their business rapidly. The chosen solution needed to adopt the proven and tested control systems that the client had in place, while at the same time having the ability to deliver a low-cost solution that could scale up rapidly.
SBS Solution
- SBS studied the processes and decide to use the off-shore model within 3 months. ‘Pain-points’ were identified for the first wave of off-shoring (~80% of the work for ~80% of the funds). All client interaction points were retained at Brisbane.
- Detailed SOPs were created and users were trained in the new process, both in India and Australia
- Deployed a team of accounting experts with Australia specific experience to rapidly build the required capabilities in SMSF accounting. We now have a dedicated team with expertise in Australian accounting including familiarity with BGL simple-fund, Premium downloads, Macquarrie wrap, BT-wrap, Bank-link, Handy-ledger, Handy-Tax, MYOB, Quickbooks and Sage
- Implemented Citrix web-based access to the in-house server to allow secure remote operations
Impact
- The India based processing back-office is now functioning as an extension of the Brisbane office, with regular interaction between the two. On-shore staff moved to high value client facing activities (with productivity increases of between 200-300% on an average).
- Scalability achieved – our client is in the process of doubling the number of funds under management without material additions to staff in Australia
- Increased profitability: the bulk of administrative work is completed off-shore for 20-25% of the annual billing to the end customers.
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