Looking into starting a SMSF to roll in existing superannuation.
I would be very grateful for tips, advice, suggestions, recommended providers, etc, from people in the know and people that have done it.
SMSF will have 2 members (husband and wife). Both retired. 1 still in Accumulation Phase (under preservation age). 1 in Pension Phase.
Simple investing requirements: cash, ETFs, shares. Property very unlikely.
Edit: About $700k combined.
Thank you.
Starting SMSF. Tips, Advice, Suggestions, Recommended Providers, etc
EveryLastCent on 10/07/2024 - 15:39
Last edited 10/07/2024 - 15:51
Last edited 10/07/2024 - 15:51
Comments
@EveryLastCent: there have an accelator account which higher interest and i use la trobe financial which has a 48 hour account
I think I'm in a similar situation to you.
Stake SMSF didn't seem to have a good cash option.
I went with Grow SMSF, which are a little more expensive (about $1400 per year) and have much more flexibility.
Currently have cash in a HISA with unicredit getting 5.25%.
We are saving a few thousand a year in fees compared to Australian Super.
If you do just want a good fixed interest rate on cash Australian Super are quite good though. If you sign up to their member direct option, but just leave it in cash, you get 5.25%, which I think is substantially better than their direct cash option, (or maybe they just display past rates for that).Grow SMSF seem good, very helpful, and very informative web page, but we've been with them less than a year, no tax return/audit yet so may be too early to really comment.
I use esuperfund and find them good.
I had a good look at Australian Super that many recommended and it looks good for the Member Direct option. But the customers' reviews are shocking. All 1 star and very disappointed/angry customers.
Even worst than ART!Moved from AusSuper Memberdirect to esuperfund SMSF in 2022. I can recommend the latter, can also say AusSuper was beyond rubbish when it comes to customer service and the member direct platform. For one's sanity, avoid this mob like plague that's the best I can say.
:)
Thanks. Sort of confirm the majority of the reviews on Australian Super.
May as well stay with ART. It used to be good when it was QSuper. Now that has become ART it has gone downhill badly.
I rather do the all the work required for a SMSF and have full control than have to fight some incompetent, painful and careless super fund customer service department.
We went the other way. Had an SMSF for years and then closed it down and moved the money across to our funds. Originally we had a great accountant, who we set the SMSF up with, and we talked to him several times a year on what we should be investing in. We also have a pretty healthy share portfolio he helped us to accumulate. However, once he retired the new people who took it on were pretty hopeless. I don't think either side understood what the other expected. There was just so much paper work and you are held responsible for everything being accurate. SMSFs are not a cheap option and you should only consider them if you know what you are doing. We also found ourselves nervous about mismanagement of the funds.
Some funds provide you with leeway on what investments you want to make. Maybe look into that first. Best of Luck.
Accountants charge a lot for SMSF setup and management. Worth if you have millions.
The idea is more these no frills, all inclusive, yearly fee SMSF providers.
They seem to do all the admin/tax/reporting work for a fixed fee.
Also most of the industry funds seem to be more interested in funding the government of the time policies rather than looking after the client's interests.best of luck with your decision.
Have you been accessing the resources at SMSF Connect?
You underestimate what accountants can do. They are skilled in strategies like reserving, contribution and pension, estate planning. Just to name a few.
For example. Did you know your will can’t tell your super where to leave your money when you die? A lot of people don’t. And this may or may not be a big deal to you but speaking to those who come from mixed marriages or troubled pasts, it’s a massive deal.
The above point most accountants would be across. And that’s one thing you’d be spending the money on…
Super will have a beneficiary nomination form which is not legally binding as trustees have final say.
That should be same as your will.
I am surprised why people don't at least get a simple will kit from Australia Post. I recently saw a person write their will on a piece of paper on their death bed which is not legally binding and causing all kinds of grief.
Super will have a beneficiary nomination form which is not legally binding as trustees have final say.
Incorrect if it’s a BDBN
@bemybubble: Problem is when it doesn't align with your will.
Two documents that are binding which are not aligned.
It isn't a benefit to have an accountant and SMSF for BDBN when you can do the same thing with your will.
Created a mountain of paperwork and grief when people don't get what they think they are getting upon your passing.
@netjock: That’s my point. The BDBN will be binding over your will. As super is federally administered and wills are state based. Federal > state. So to your point, if you’re BDBN says different to your will, your will won’t have any weight or bearing to the super instructions of your death benefit (unless your BDBN leaves it to your LPR)
@bemybubble: Just your family getting pissed that they won't get what they thought they were getting.
I've seen that play out recently.
@netjock: There is such a thing as a binding nomination in super. Non binding will leave it up to the trustee, although they will usually go with the nomination unless there's a good reason not to. You can nominate your estate and it will then be dealt with as per your will. Trustees love this, means they don't have to get involved in deciding.
Most accountants cannot provide financial advice yet ppl still rely incorrectly on them to provide financial advice.
I created SMSF from scratch (Trust deed, Meeting minutes, investment strategy, tax filing etc..) Not an accountant or finance professional. Both in accumulation phase though.
I'd suggest lot of research and follow the guidelines and you can skip almost everything except the annual Audit.
https://smsfwarehouse.com.au/smsf-audit/checklist/
its a good place to start.
Our SMSF is mostly on ETF and managed funds. So trying to keep it simple.
my 2 cents
Some of what you say is accurate, some isn't.
You were expecting your SMSF provider to also provide financial advice. That's 2 different things, even if your SMSF combined them.
SMSFs are not a cheap option
My SMSF annual costs: Software: $220; Audit: $300; ATO Levy: $259
I would like to see any non-SMSF of significant size match that. It doesn't take much in super to make a SMSF better value IF you're willing and capable of doing the bookkeeping and making own financial decisions.you should only consider them if you know what you are doing
I agree with this part
IF you're willing and capable of doing the bookkeeping and making own financial decisions
Depends on what value you put on your time. If you are on $200 per hour then taking two hours to do the book keeping is money right there.
I love it. Gives me a break from Sudoku and the garden just before spring.
@bbinc: It's nice to be retired, isn't it? 😉
And the accounting, book keeping, investment reading and selecting, tax returns, etc, keep your brain functioning!
How does your wife feel about this? As a trustee (or director of a corporate trustee) she'll need to be pretty hands-on with the fund. If anything happens to you, she'll be running it so she needs to be involved from the start in investment decisions. Pardon me if this is already the case, but your post doesn't really state it.
Father in law was a financial planner with a smsf but now in his twilight years switched to Australian Super also,
He has plenty of time to do paperwork in retirement plus time has $0 value because you are not working.
It is a joke.
A lot of people focus on cost. Save $100 on SMSF when the work they need to do is probably $1k if you value it correctly.
That said I'm paying like $1200 including audit plus supervisory levy which is probably twice as much as some of the other people here but I am time poor and job per hour is much more.
Netjock - even though I’m not working, if I could get reliable, non rent-seeking help at that cost I’d do it. I’m $220+$330 + levy, and it’ not that hard now I’ve been doing it for 15yrs. But I take shortcuts. Eg: don’t do dividend reinvestment because it’s extra data entry.
if I could get reliable, non rent-seeking help at that cost I’d do it
There is your problem.
it’ not that hard now I’ve been doing it for 15yrs
You are talking from experienced old hand. You probably spent at least 10 hours working it out the first time around, inflation adjusted that might be rent seeking and from a professional point of view unreliable because a pro could have worked it out in 5 hours.
Don't forget about insurances, you'll need to set them up in SMSF.
I could be wrong on this part as I briefly glanced over recently on a fyp this could be tricky too. If you transition, then you'll be ok. But if its a stop start, you'll be paying more. Definitely get advice around this.
What insurance? Life, income? It's optional fr my understanding.
You are right, it is optional but, dependent on age, industry funds offer group insurance to fund members which will cease when someone leaves the fund and if they still want cover will have to by directly or via an adviser but can pay for it within the SMSF using that fund's balance.
Yeah this is true. However I found life insurance is cheaper with personal than smsf. That may be an option.
ATO requirement, every year trustees must consider insurance needs.
Link? Consider means you don't have to purchase but aware that you might need it.
And if you are already retired with no dependents and a healthy super balance, your needs are likely nothing.
@md333: Nevertheless, ATO requires trustees document their consideration. Link not needed as all trustees must read this detail.
@bbinc: I agree that insurance is no longer needed once retired with no debt and enough funds.
How does the trustee have to document their consideration to satisfy ATO requirements?
Hi. I have my smsf with McLowd. I do my own accounting as I’ve nothing complicated like property. Shares and cash. Auto import bank transactions which you allocate to whatever it was - interest/dividend/asic fee/audt etc.
if you computer literate and like doing this kind of thing it’s great. Cheap as chips. They also have businesses who are auditors etc. Who have reviews from mclowd users. I found auditor who charged just $350 for return when others were charging $550. Have a look and I think you might be able to set it up for free. I knew nothing but due to circumstances I HAD to do it myself at the start.Also I use LODGE it - associated with McLowd - to lodge my tax return - again cost so cheap compared to paying accountant….. saved thousands ..
I’ve heard ESUPER are really good with low fee - I looked at one stage of transferring to super but they don’t accept existing SMSF. They do a lot of things.
Best of luck.
I'm impressed that you were able to make McLowd work. It just seemed too hard for me.
What made you want to move to esuper?btw I found an auditor who charges just $300 when others charge $350 ;)
I use BGL which costs $220pa. Although I hate paying for something I can do myself, automated bank & stock feeds, reporting and tax returns make it good value.
They also have a network of auditors who know the system, so it makes thier job easy so they can charge less.They can accept migrating existing funds :) But they do assume that you're an accountant. They have a good service desk, but will only assist in using the software, they will not advise on how to do something if that makes sense.
I had mclowd for first 3 years but realised its a lot easier keep it in excel. But Mclowd is a good option nevertheless.
It really depends on your competancy with bookkeeping and tax law.
You can do it yourself e.g. use cleardocs to create the trust. You need to find an auditor who can understand your spreadsheets or however you manage the books.
There is free open-source software for the bookkeeping, but I couldn't work it out.Does Stake offer a SMSF management service. i.e. they do bookkeeping, audit & tax return? I went with esuperfund, but they started at $699 and put up thier price every year.
They do all the accounting, you just specify what every transaction is at the end of the year. However, you get no visibility of your data: e.g. you can't see what capital gains or losses you are expecting so you can do EOFY trades accordingly.I now use BGL. This is just the software - you have to do the bookkeeping. It produces all reporting, and BGL have a network of auditors that know the software.
Annual costs: BGL $220; Audit $300; ATO Levy $259btw I recommend paying the extra for a company rather than a trust. Planning for the future, it is far easier to replace a director than a trustee.
I looked at Stake because there was a deal posted here a few weeks ago.
RRP $990 -30% = $693
https://www.ozbargain.com.au/node/849701They do:
SMSF setup, accounting, auditing and tax all taken care of, starting from just $990/year.OUR SPECIALISTS TAKE CARE OF:
Preparation of SMSF EOFY annual statements
Annual investment and performance reports
Independent annual SMSF audit
Preparation and lodgement of SMSF annual tax return
Preparation of annual trustee resolution and minutes
Lodgement of activity statements (incl. PAYG & BAS)
Annual member statementsSo I think that's everything that is required.
There is also a $129/year for actuarial certificate if both accumulation and pension accounts operating in the same SMSF.
And a $259/year ATO Supervisory Levy and $63/year ASIC annual review fee if company corporate trustee is required.Your setup is much cheaper though, even with the BGL software cost.
The BGL software does all of those statements, reports and returns automatically, as long as the data entry is correct. Most is auto fed from your accounts, but there’s always a few transactions you need to complete or correct. Double entry bookkeeping took me a while to understand.
Use a specialist provider, I didn't use my normal accountant - I just googled smsf and compared fees. I started mine in 2012 with $250k now happily sitting on $750k net, I have property and shares pay $1500 annually for Redwood Advisory (www.redwoodadvisory.com.au) to do the annual return for me, they have been good and don't outsource overseas which is good i just send paperwork at the end of the year and sign off pretty easy.
Why talk to an accountant when you can talk to internet randoms?
People will spill their guts about how cheap they are getting it.
Then you spend hours figuring out and digging into everything. Then paperwork. Ends up costing you thousands.
Do you know an accountant that you trust?
I've been burned by a tax agent and a financial planner, I'm not looking for 3 from 3.
I'd rather the wade through the opinions of 1000 internet randoms and glean any useful ideas.Despite the gov making it as complicated as possible, there really isn't much to it.
Totally agree. Settled for ‘going to school’ and doing it myself.
Exactly right!
Get ready to be reamed by accounting fees have fun.
SMSF generally makes more sense in accumulation than retirement. Considered Hostplus for about ~$900/year with your balances? Your mix of cash/shares/etfs might be covered by their index balanced product if you don’t absolutely need to fiddle and just want something growing with some defensive assets…
Why's that? Don't they start charging additional fees for running a pension?
How is a SMSF any less suitable in pension phase?
Would HostPlus total fees be only $900pa for a $700K account? Someone earlier claimed AustralianSuper woudl be $500-700pa, but turned out to actually be thousands.
I think one of the advantages of an SMSF over a pooled fund is the tax advantage in not paying CGT as you go. I think you would miss out on that if already in pension phase when changing to SMSF.
Choice plus and similar has no ongoing CGT
As md333 said, SMSF can convert to pension without realising CGT unlike pooled funds, works out to about 0.5% pa.
Hostplus pension is $4.50/week so $468 for OP+Spouse. Investment options vary, but Hostplus’s index options at around 0.06% adds another $420 on a $700k balance. ETFs with brokerage would struggle to match the $420 and an SMSF would also struggle to get compliance under $468. Plus you take on all the liability with an SMSF that you don’t with a pooled fund.
I see a large upside to an SMSF in accumulation, but for retirement phase think the pooled funds win out.
My SMSF invests in Vanguard ETFs $0 brokerage and audit is $300, platform $220 at ATO Levy is $159.
Hostplus sounds pretty good though if that's the only costs.umm what liability does SMSF take on??
@SlickMick: Oh fully aware your numbers are able to be done, but at a bit of a learning curve compared to someone signing up for $990+$259 for Stake as an example. MER of VGS can be higher than a lot of the super funds…
As the director/trustee you have obligations under the Superannuation Industry (Supervision) Act 1993. I doubt you’re doing anything too controversial with your ETFs, but a lot of people seem to get in to an SMSF not understanding the same legislation we use to stop Hostplus directors from messing with our retirement funds applies to them. You need to pay closer attention to contribution limits and ensure the fund is compliant otherwise it can be deemed a non complying fund and taxed accordingly. Again not hard, but an awareness is required.
Happy to keep up with legislation changes while working, but when retired and with the CGT advantage gone, I think I’d happily handball it to the likes of Hostplus and get on with enjoying retirement.
@SlickMick: do you have insurance in your fund?
The liability is the person running it, if you have a stroke/get dementia what happens etc..
our family had the misfortune of the SMSF being controlled by someone getting dementia.
@SlickMick: Just reviewing a few months of this discussion. One thing most have overlooked when comparing fees vs SMSF is that industry funds etc fees are per member, SMSF running costs cover two or more members.
I closed my substantial SMSF fund after realising I was not micromanaging my investments. APRA, accounting and audit fees cost more than the fees charged by super funds (I'm with Award now).
Unless you are interested in WORKING the SMSF then it's a futile endeavour. You will never buy shares at the same price a big fund will
Years ago SMSF funds has perks where you could use money from your fund, but not now
Compliance with a SMSF is ongoing, seems the accountants are the big winners.
Compliance costs 5 years ago ranged up to $10k per annum. Could be more in 2024.
The industry fund I chose is hassle free. Award SF doesn't charge additional fees for Financial Advisors.Solid advice.
It requires a level of effort and commitment to go the SMSF route, which may wane over time, and unless you have relevant experience, you are unlikely to out-perform a well managed super fund (on a "like-for-like" risk basis). It's just too easy to not manage your investments!
I've gone with AustralianSuper, focusing on managing my balance across their pre-packaged investments based on my risk profile and view on macro-economic conditions. I also have a small portion of my balance in their "Members Direct" feature, which allows me to "play around the edges" with some direct investments, but that's not expected to make a material difference to my retirement.
I value total returns and the predictability of those returns, rather than over focus on fees / costs.
The platform you use for super is separate from investment choices. Like you said, you're mucking around trying to guess the market with (part of your funds in) an industry fund, yet you could have a SMSF and invest only in ETFs.
Hostplus can do low cost indexed funds (Global + Aus), and ChoicePlus is there if you want specific ETF's.
The question is which can do it cheapest
Sure, for some, but I don't think that's the whole picture when looking at setting up a SMSF. Going through your super means admin & overhead work (compliance, reporting etc) is saved, and for many there will be a dollar figure where it's worth spending an extra few hundred to save them x hours of work. Everyone's tolerance will differ, and some people will enjoy that effort.
I'm not against SMSF's, if you want to invest in stuff a super fund won't let you do then makes sense to me. Cash and basic ETF's? I struggle to see many advantages over some of the super products on the market.
@Randolph Duke: There are plenty of options for SMSF: do-it-yourself with spreadsheets or open source software; online systems that just prompt you to categorise transations and upload documents and they do all the accounting; or paying accountants and financial advisers.
What I'd like to see happen is get rid of all the red tape that has built an entire industry for this, and just let people manage thier finances, or pay for assistance if they choose.
SMSFs have cleaned up the super industry a lot, but there are still some rorting the gullible. Eventually I see active investment funds being extinct, or rare just for people with more money than sense. (Those who want that will more likely use SMSF.) As for passive investing, people will realise that they can invest in ETFs themselves without paying someone to make the same investment.
There is still a place for super funds, but there aren't many cases where they're a better option that a SMSF.
compliance costs on SMSF are a fraction of that now. plenty of audit packages etc you can use and run a SMSF for well under $2k. though unless you are after some specific investments that are not easily catered for by the bitg super funds then just shop around for one of the big funds that doesn't screw you on fees (many of which are well hidden or obscured if you aren't careful).
$300 for an audit. $259 for the ATO's levy. Anything additional is just spending to save time or money.
If your SMSF fees were more than Award, either Award is exceptionally cheap or you were paying more than you needed.
Would you care to elaborate on retail brokers not gettng the same price as big funds?
When could you ever use money from SMSF? No wonder we have to be audited if trustees thought they can do that.
That's incredibly cheap. Your figures don't concur with a previous poster though?? Are you sure they haven't hidden some?
e.g. I compare thier investment fees against an equivalent ETF.
Those are admin fees as listed on the transaction statement, and hence deducted after returns. There would be other fees absorbed in the investment returns as with all investment products, meaning the ~10% returns could have been even higher.
Ultimately all that really matters is the (ongoing) nett returns vs risk (and I suppose convenience, workload, etc). On that, it stands up well.That’s the problem. I. Looked at Hostplus, fees were negligible but the investment fees were hidden. To the tune of 8k c/f my investment fees with ETFs and direct shares.
You need to dig into that carefully. The big fees are actually the fees absorbed in the investment returns. If you are going to compare you need to get all your fees together.
If you're not going to be holding direct property I personally wouldn't bother with the hassle of a SMSF. There are several super platforms out there that offer great flexibility to invest in shares, ETFs, managed funds, term deposits, floating rate notes etc and they are not expensive these days. You sound like you have investment knowledge but too many people have SMSFs as a status thing and don't manage them well. I remember there was some crazy stat that around 80% of SMSF assets are held in cash.
I would strongly recommend talking to an accountant at least, but ideally a financial adviser too.
Don’t focus purely on cost. Asset allocation (how the money will be invested) is far more important on a $1m balance.
penny wise but dollar foolish
The only reason for an accountant is if you can't do the bookkeeping yourself. (Budget SMSF providers provide the accounting.)
Financial advice is great. I find ozbargain provides better advice in my experience. You just need to work out who's right and who's wrong.You can make same investments in a SMSF, but with less fees.
I think what Devils Advocate means is that there is no point in saving a few thousands when then all your funds are mismanaged and end up with little returns or losses missing out on potentially tens of thousands.
Although, as SlickMick point out, these days with index ETFs like VAS or VDHG it is much easier investing in a similar manner to superannuation funds, but with lower fees
OP: I wish you well in your deliberations. SlickMick and myself are the main hands on responses you have. Both of us have had experience with external providers and chosen to go down the same DIY route. It’s been great for me, but it’s hard work getting across all the rules. I’d considered moving to an industry fund, but the investment fees are high. They promote their admin fees, which are low. After over 15 yrs of running the fund with the BGL software, it’s not very hard, but I wouldn’t start from here. Too much to learn. However, I’m locked in with a Centrelink ‘grandfathered’ pension from the fund. If I close the fund I lose the exemption. As of today that probably makes diddly-squat, but down the track ???
As for an external provider, great if they get it right every time.. Not an SMSF, but a Body Corporate managing a property, was good until new staff and systems started repeat paying service bills. And set up their own insurance broker to add a new fee layer. Etc etc. Hate the rent seekers.I hear what you are saying.
I also enjoy doing my own tax (for everyone in the family too! For free of course!) and even for the family trust.
I am normally very accurate and attentive keeping up with new tax rules and making forecasts in advance to optimise outcomes. Only the last financial year I slipped a bit with my forecast ending up with a Medicare Levy Surcharge that I could have easily avoided by having funds in a 6 months term deposit maturing after 30th June rather than in normal HISA. With retirement and everything else in the way, I didn't keep up with doing my forecasts and I didn't see it coming!
I too hate paying someone to do something I can do myself. Although sometimes you have to pay for convenience.That term deposit income shifting strategy can be handy, but I fear I’ve just shifted the pain to next year..
Yes, but next year (this year now) I am retired so I will pay very little tax as no more work income!
@EveryLastCent I think setting up SMSF just purely to save $2000 a year is probably not worth it in my opinion, the paperwork, the recording keeping and the hassle involving in SMSF
are better off outsource to someone else.if you want to go down SMSF, it has to be more than saving a few bucks, it is the control, it the outperformance return etc..
I setup my own SMSF in my 30s due the superfund poor performance compared to my own personal record and I want more control
I have not looked back, I now also run my working adult children super under the same SMSF.back in the days before online stuff I got an accountant to do it but I move over to https://www.onlinesuperfund.com.au/
around 6 years ago and I am very happy with them$2000 a year saved at an average return of 8% makes over $30k difference in 10 years or $100k over 20 years. Those are the sort of savings that make huge long term benefits to your super.
$2000 pa is way too high a figure; OP will save a similar amount going from a high cost super fund to a low cost fund.
Also using nominal figures overstates the benefits
lot of record keeping and work involve running a SMSF, personally I wouldn't do it just purely to save 1000-2000 in fees, it has to be more than just that
I rather spend time sitting on the beach or go on holiday and don't have to worry about the dread paperwork at the end of each FYremember the money you save in fees doesn't comes free, it will cost you times and other headaches at some point
You are right. But on the other hand the work involved keeps your brain active.
If your goal is to significantly boost your super then it takes time and effort. If you aren't willing to do it then of course stay with a fund.
If you value time more than money then probably not worth it.
Considering you want simple options many stock standard funds can provide for that. Alot of index options now too so can get fees lower than 1%.Wow! Thank you so much for all the GREAT advice!
There are so many knowledgeable people on Ozbargain. Some people here REALLY know their stuff. And I find it very valuable advice, because people have learnt it for their own use over the years.
And so many ready to share their knowledge.
So much better than some random accountant looking to make as much money as possible out of you for initial advice and ongoing services.I spent a lot of time working out all the fees from my current super fund and from others like Australian Super (recommended by many).
I still want to research Hostplus ChoicePlus (also recommended by many).Looking at my super fund's fee more in detail, I learnt that the admin fees and cost are quite low ($62.40/year fixed plus 0.06%). The investment fees and transaction costs are sort of hidden in the unit value (so the actual returns are already reduced by such fees). These fees are quite high for the diversified options (where they actually actively manage the investments), up to 0.74% (high grow) or 0.65% (balanced)
However there are other simple asset class options with much lower fees like Australian Shares Index 0.09%, International Shares Index 0.09%, Cash 0.07%.
So it is actually possible to create a balanced portfolio of your liking by mixing Australian Shares, International Shares and Cash incurring an overall low 0.07% to 0.09% investment and transaction fee.The SMSF would certainly be cheaper, especially with the costs reported by some people (audit $300, software $220, ATO levy $159, Actuary Certificate $100). Thank you @SlickMick and @bbinc.
However the investment costs would have to be added, like brokerage (although @SlickMick mentioned that Vanguard ETFs can be had with $0 brokerage. I suppose through Vanguard directly?). Also ETFs also have a certain % of management costs inbuilt in the unit price. For VAS it is 0.07%. VDHG 0.27%All considered, for the investment types I am considering, a SMSF is probably only marginally cheaper than my current ART super.
Except for the low return offered by ART for the cash part of the funds, where an extra 1.5% can be obtained through a SMSF bank account.
And in times like these, with sharemarkets at all time high, my cash part is very high, so it makes quite a big difference.The other consideration is also how irritating, time consuming and frustrating can be dealing with a large super fund. The majority of them seem to have very bad customers' reviews.
And many large super funds seem to be more interested in pushing and supporting government policies with members' superannuation funds rather than look after members' returns.
With a SMSF you don't have that, but you have to deal with an accountant for the audit, ATO for returns, etc.A lot of variables to be considered.
But this forum has certainly been a great source of good advice.
So, "what did your accountant say when you asked him?". I didn't, because I can get better advice in Ozbargain! 😉Brokerage costs - Selfwealth, $9 per trade.
I think you are motivated enough to run a SMSF but you probably want to do it properly rather than just purely save on fees
So, spend the time and research and try outperform the market, get into investment that delivered you better return
and grow your super capital base as well as paying you a passive income.I am about 10-12 years away from retirement and I am absolutely intend to keep growing my super balance through capital gain
even in retirement while also collect passive income from it. My goal is never dig into my capital but also grow it in retirementgood luck with your journey with SMSF only thing I would advise record keeping is king in SMSF, keep everything, file everything, account for every cent
that will save you a lot of hassle if they need to query a certain transaction with audit.I have a scanner at home and I scan everything and file them on my internet cloud drive and have multiple backups so I can easily search for it
and find any record I want at a click of a few buttons
If you just want to buy shares, ETF's and hold cash, an SMSF is inappropriate. Unless those ETF's and Shares are 'exotic' in terms of how they can be accessed, there would be no merit.
The obligations you take on as trustee of your super fund is onerous and breaching your obligations is easy, particularly when you are trying to DIY it as you are.
You really need financial advice.
If you are hell bent on doing it yourself and prepared to take on all the risks that come with that, you should be considering a platform instead of an SMSF.SMSFs are utilised for several reasons.
1) To save on fees
2) To incorporate assets not normally found in a commercial Super fund.
3) Other things I can't rememberYour asset mix doesn't appear to be outside the boundaries of most industry funds, many of which allow direct access to listed equities of your choice.
Without getting too specific a $700k industry fund, if chosen well, will only be $400 in annual fees. Have a look at your setup and ongoing compliance costs of an SMSF. For basic investments there's no advantage in an SMSF.
Thank you brad1-8tsi.
At this stage the idea was to save on fees, or at least have the best value fees and costs arrangements.
Sone industry funds can be cheap, but having 2 separate superannuations (husband and wife), the costs I found so far are more than $400.
Then there are the investment fees.
Benefit of a SMSF is the the cost is only one for 2 people and eventually if required children's super can be there too for the same cost.
Another advantage of SMSF is if you include your children as members - (whether they contribute or not doesn't matter) - then it is a good vehicle to transfer your balance once departed.
I found this website very useful. https://passiveinvestingaustralia.com/about/
In a nutshell - use your industry superfund as a low cost pseudo-SMSF (non-property investments)this article is particularly interesting. https://passiveinvestingaustralia.com/income-swap-strategy/
And this one is eye popping. https://passiveinvestingaustralia.com/how-1-percent-fees-cos…if you include your children as members - (whether they contribute or not doesn't matter) - then it is a good vehicle to transfer your balance once departed.
How do you transfer your balance?
My understanding is that each member has their own super balance, all pooled in the SMFS. Once a member dies his/her balance has to be distributed according to binding death benefit. I suppose what you mean is that assets don't need to be divested by the SMSF and can stay invested but be transfered to the super beneficiary within the SMSF. In case of non dependants they still have to pay tax on the concessional part of the inherited fund though.@EveryLastCent: You are correct, your children super and your although pool into one, each has their own separate balance within that pool
and at year end accountants and auditor will lodge a tax return with each member balance according to the fund return.
@EveryLastCent: Their websites a bit hard to navigate https://www.australianretirementtrust.com.au/investments/opt… but it shows a 1 year of 4.71% in retirement phase which doesn’t have the 15% tax rate accumulation has. It’s clear your mind is made up, but honestly it’s unlikely you will get higher returns or lower fees than what you can get now. If it comes down to customer service, you get none in a SMSF. Consider writing a complaint to the CEO about your concerns, it might help for those who stay in it.