One question our clients commonly ask is “How do these data feeds work”? This article answers that question and provides an insight into how the third party authorities you provide have a huge impact on our how we look after you and your fund.
Probably the most important misconception is that when a you sign a third party authority form is that we have “access” to your account or we can transact on the account on your behalf. This is absolutely incorrect – to confirm:
A third party authority does not provide us with the ability to conduct any transactions on your behalf or access to login to your accounts.
Any authority simply provides us with a duplicate copy of transactions for a bank, broker or investment platform account. Think about a data feed as providing the exact same information that you provide via paper statements, however the information is already converted into electronic format ready to be used to complete your SMSF accounts.
How it works
Depending on the particular account, broker or investment platform, the type of information provided can vary:
- Bank Accounts – We can receive transactions from more than 60 banks, credit unions and building societies. In addition, a number of our preferred bank accounts also provide daily balance information to enable us to easily confirm that you bank account is reconciled and up to date. Click here to see a list of available banks.
- Share Brokers – Currently we receive electronic copies of contract notes from 15 popular brokers. The majority of these preferred brokers also provide balance information so we can easily see if the number of shares we have recorded in your accounts matches with your broker. In addition there are about 30 other brokers that provide electronic copies of contract notes only. Click here to see a list of available brokers.
- Wrap Accounts – There are 13 major wrap accounts / investment platforms that provide comprehensive information to us including investment holdings, investment transactions (buys and sells), income and cash account transactions. Click here to see a list of available wrap accounts.
- Term Deposits – Our Money Market service provides balance and transaction information from more than 20 term deposit and high interest at call cash account providers.
Who is involved?
There will generally be a software intermediary that enables the particular bank or broker to push transaction information through to us.
Class Super Pty Ltd (Class) is the software company Superfund Partners uses for the preparation of your SMSF accounts. Class also acts as an intermediary between Superfund Partners as your accountants, and the various banks, share brokers and investment providers you utilise for your SMSF.
By signing any requested third party authorities, your banks, brokers and investment providers will push your SMSF transactional information through to Superfund Partners via the Class system. Class or Superfund Partners do not have any logins or authority to contact your bank or investment providers, and the entire system is built on a need-to-know basis meaning an individual user (i.e. Superfund Partners) has access to only the data that they are entitled to view.
Class has the highest possible security systems and procedures in place and all transaction data is encrypted. If you would like further information regarding Class Super, and the security and data controls they utilise, please contact us.
Superfund Partners is one of only three SMSF administrators Class Super recommends nationwide.
BankLink is another intermediary who enables your bank, credit union or building society to provide Superfund Partners with an electronic copy of your SMSF bank transactions on a monthly basis. We utilise BankLink for accounts that do not provide information to Superfund Partners via the Class system.
BankLink has been in operation for 25 years and is used by over 4,500 accounting practices and more than 250,000 small businesses and SMSFs across Australia, New Zealand and the UK.
If you would like further information on the BankLink system, please contact us.
What are the benefits?
The major benefits for our clients are as follows:
- Your accounts will be prepared and your return will be lodged significantly faster because we will not have to undertake any time consuming manual data entry.
- It enables us to keep your accounts up to date month by month, to better enable your contribution caps to be monitored to ensure you do not breach the limits and become liable for excess contributions tax. It also enables your pension drawings to be monitored to ensure the minimum pension is drawn and your fund retains the tax exempt status that comes with it.
- Because of the time savings we can achieve via taking advantage of the data feeds available and the automation our system provides, it frees our time so we can focus more on strategies and advice that help you get the most from your SMSF.
- It saves you time. Once your SMSF has been on our system for a year or so, and all data feeds are active, the amount of documentation we require and information we need to complete your accounts is significantly reduced – saving you time chasing statements for us. Please note that you will still receive paper statements for your bank accounts – signing a third party authority does impact this.
- You are not unfairly penalised with extra fees if your SMSF has a large number of transactions or investment trades – our system eliminates most of the time-consuming manual labour component of completing your accounts.
- It improves accuracy. When we take over a SMSF from another accountant we are amazed how often the investments recorded in the accounts are inaccurate – especially when it comes to shares as dividend reinvestments, rights issues and corporate actions are often missed.
- It keeps your fees under control. Due to the time savings we can achieve, Superfund Partner clients on average are paying significantly less than the average accounting fees most SMSF trustees are out-laying for their funds. For the current 2013 financial year to be eligible for our competitive fixed fee packages, you will be required to sign all requested third party authorities enabling Superfund Partners to receive you bank, broker or wrap account transactions where available.
Although our system is a giant leap forward compared to traditional accounting methods, it is not perfect, and we still have certain minor limitations. One key thing to be aware of is that generally we cannot obtain historical information for bank accounts, meaning if you provide us an authority form in October, we will still need to obtain the statements from you for July through to when we start receiving the transaction data feed – which can take up to a three weeks depending on the bank.
There are also still a small number of accounts that we cannot obtain a data feed for. The most common unavailable accounts being the Commsec direct cash and investment accounts that are linked to a Commsec online trading account. Work is currently being by us and our software partner (Class Super) to have these accounts operational and feeding directly through to us in the next six to twelve months. We look forward to these accounts becoming available as Commsec is by far the most popular online broker used by our clients.
The above information is of a general nature, and if you would like further information in regards to how the above applies to you and your SMSF, please contact myself or Alison Kerrigan via email or give us a call on 1300 889 282.