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
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.
Please don't do it.
I had family do an SMSF, primarily for property investing.
They made a lot of money, mainly from commercial property.
It was all run by a lawyer who was part of the super fund and did it for everyone on their own time, including all family and friends.
They did OK with money and worked out better than an industry fund.
However, the lawyer running the whole scheme got dementia in his early 60s, and nobody had a lot of the paperwork but him.
It was mixed up in his work files, which his partners controlled.
It all got very messy quickly. They had to hire people to sort it out in the end, and the fees promptly reached the tens of thousands. They also needed to quickly sell off assets for the member with dementia.
It was stressful for everyone included.
Anything can happen, but dementia doesn't strike suddenly. I guess there is time to rearrange the SMSF before it gets too bad.
It may be difficult to replace an individual trustee (not sure though), but with a corporate trustee all members are also directors of the company so they can run the company that runs the SMSF.Every last cent : correct especially re corporate trustee. Regarding rearranging - only if someone notices what is happening. Which means being able to watch what’s happening with access to all accounts and assets. Most likely the first sign would be an auditor’s query, or a failure to lodge, and lots of damage could be missed for the first year or two.
The set up fee can be as low as DIY $0, or around $2,200 depending on the structure and use of accountant (corporate trustee or individual trustees). Annual fees inclusive of audit, anywhere from mostly DIY (Esuperfund, you do 80% of the work uploading and categorising transactions and docs and they review and send to audit) $1,400, to all prepared by accountant $2,200-$3,300
I just checked out Hostplus as some comments recommended.
They have very low fees, much lower than ART.
But the customers' reviews are not good at all.
We all know how reviews can be manipulated both ways by the company itself or by competitors.
Are there any Hostplus members here that can comment on their experience please?The vast majority of people reviewing super funds are people with complaints.
Those ratios are due to manipulation, it's due to 99% of super customers interactions not being worthy of someone spending time to leave a review.Yes. We are lucky here to be able to get more reliable first hand feedback from other ozbargainers. That's why I am seeking comments from people in Hostplus.
Like if you were to ask me about ART, I could tell you how good it was and how very good the customer service was when it was QSuper. Now that it has been gobbled up in Australian Retirement Trust the customer service has become very bad. Now they spend the money in a lot of TV ads instead!!!
FYI, the firm I started with is mentioned in these articles. Back then it was a small firm, doing a great job at a small fee. Audits were $60.00 for example. Article refers to $135 Million compensation …
As it got bigger I started noticing red flags - missed opportunities with corporate splits, inability to get pensions started, slow responses, increased fees etc. At least I never used them for investments, just admin. That's when I started BGL SF360 and took it over myself.
https://smsmagazine.com.au/news/2022/09/19/dixon-advisory-hi…
https://smsmagazine.com.au/news/2024/07/11/advisers-on-hook-…Thanks bbinc.
I have run some numbers and probably I will get very similar administration and investment costs with Hostplus without the extra work for a SMSF. They have very competitive fees.
I started another forum to get feedback from ozbargainers that use Hostplus, just in case cheap fee also mean a nightmare experience…
Planning to setup SMSF (Corporate Trust) to buy a piece of land so can you list intial cost and running cost for SMSF? No other investment planned at this moment as doing other investments outside and inside super.
I'll be going over to SMSF at the end of this month. The biggest reason is that I want to put some cash into crypto which Australian Super doesn't do.
For people with 200k or more in super and in accumulation phase, if not going with SMSF, make sure that the money is not in super fund's pre-mixed allocations, but sign up to their Members Choice (AusSuper) / Choice Plus (Hostplus), to minimise CGT tax drag.
Do I get that right?Choosing them will cost more fees though, and each time you get contributions from employer, you need to buy shares yourself?
Does it cost anything to move the money from the pooled fund to Members Choice account?
I use esuperfund since 2010, when I set up my SMSF with my wife added as as second member in 2011.
If you are retired and over 60 then I suggest you start a pension account rather than leaving the funds in the 15% taxable earnings accumulation account.
Once in the pension phase you have to pay out the minimum 4%-6% each year to fund your retirement but it is all untaxed.We use Great Southern bank saving accounts @4.85%, ANZ set by esuperfund @4.25% and the Macquarie bank CMA accelerator @4.65%.
For Term Deposits Great Southern Bank at the moment have even better TD offerings that Judobank (I use both).It can be a pain getting bank accounts set up, multiple forms to fill post to GSB unless you are lucky to have a near by branch, but it is part of the SMSF adventure. Other than having to fill/submit forms & wait for new TDs & Accounts plus the initial setup GSB is OK. Both their Online and App banking are reasonably functional.
Macquarie CMA & Judo bank TDs all done online. ANZ bank account setup done by esuperfund as part of their service.
Brand new user.
Sockpuppeting.
Reported.
Buh-bye.
@EveryLastCent What did you end up doing? I'm in my research phase and ran into this thread
I'm glad I established via Esuperfund an SMSF in Dec 2023. My super balance went from $105K to $390K since then. If I left it in ART I would be lucky to have $130K. Creating a SMSF is an enjoyable process if you enjoy numbers and being organised. I enjoy now watching CNBC/Squawk Box. Probably should have persued a career in finance.
I hear Stake is currently the cheapest option, but I enjoy using ESF's platform and how quick they are to respond to whatever I ask of them via email. The only criticism is that they keep increasing fees, I think it's at $1499 now (first year setup and annual fees waived). Getting a bit pricey.
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.