There is a new source of well paid conveyancing matters for lawyers.
We have all heard about the explosion in the number of self-managed superannuation funds (SMSF) in recent years.
The numbers are mind boggling. The Australian Taxation Office has released figures for March 2016 showing that there are nearly 600,000 individual funds, holding close to $600 billion in assets.
While those numbers are amazing, what gets really interesting for lawyers, is who has these types of funds and what they invest in.
While I am generalising, you will find that SMSF fund members are typically higher net worth individuals. Just doing the numbers tells us that. If we say the typical SMSF is a so-called mum & dad fund and therefore has two members, then the average fund balance is somewhere around $500,000 or an average of $1,000,000 per couple.
While these are the types of clients that many commercial lawyers would very much like to attract, it actually gets better than that.
Where do you think that $600 billion gets invested?
Essentially there are just three areas where the bulk of these funds will be invested, fixed interest, shares and property.
If I just focus on the property area and let’s say that 25% of the funds in these super funds ultimately gets invested in property, then that is a pool of $150 billion.
A lot of property.
While some of this will be invested via property trusts, the bulk of these funds will ultimately be invested in direct property, be that commercial or residential.
That is one of the attractions of a SMSF and based on my own past experience as an accountant and financial planner, it is one of the main reasons why SMSF’s appeal to many investors.
A common strategy among particularly small business owners is to ultimately own their own business premises in their SMSF.
These transactions often do not go through a real estate agent as the property is already owned by the client themselves or a related entity.
In addition to that, with the ability of SMSF ‘s to borrow, I would suggest that most funds borrowed for this purpose would also be invested into property.
Thus this potentially enormous pool of property with the ensuing purchases, sales, transfers between entities, registration of mortgages and so on, all adds up to a lot of property work for lawyers.
I suggest that this is a whole new source of conveyancing work that was hardly worth worrying about in the past, when SMSF’s were a much smaller part of the overall superannuation scene and borrowing in SMSF’s was just a dream.
If you want to get a slice of these off-market property transfers and potentially all the other property work that is happening within these SMSF’s, then one of the best ways to get your share is to build up referral relationships with other professionals who could potentially refer this work to you.
In this case those professionals are likely to be either accountants or financial planners.
It is likely that an accountant would be more inclined to refer this type of work to someone who can demonstrate a good knowledge of superannuation and the related legislation. This potentially swings the likelihood of those referrals being directed more towards lawyers rather than conveyancers, who may find it harder to demonstrate that knowledge.
No doubt this opportunity has been discovered by some, but with superannuation rules constantly changing, the opportunities in this area will only increase.
Do you want your share of the new source of conveyancing matters?
Increasingly accountants and other professionals are becoming great sources of quality referrals for many lawyers.
If you want to build your professional network with the aim of getting more quality referrals, in less than one unit of your time, here is a link to our FREE 4 minute video.
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