$0 SMSF Setup, $0 First Year Then $670 Per Year after That!

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onlinesuperfund.com.au

• 

  BluBoy on 11/01/2013 - 22:36

  +10

  So how did the 'cheap' three SMSF services compare to each other?

  Basic Fees and Features:
  

  Company	Setup	First Year	Ongoing (PA)	ACCOUNTS	ASX	Funds	Cash	Foreign Shares	Property
  Online SuperFund	$0	$0	$670	ANY	ANY	ANY	ANY	N	N
  eSuperFund	$0	$0	$699	ANZ	CBA	ANY	ANY	Y	Y
  Superannuation Warehouse	$0	$0	$708	ANY	ANY	ANY	ANY	Y	Y

  eSuperFund prefers clients use ANZ V2 transaction and CommSec (or 'eBrokering') traing accounts. The other two do not have this restriction.
  Online SuperFunds only allows the basic type of investing stratergies. International Shares, CFDS, Metals, Property etc are not offered.
  Note that they are quite honest and open about it though, see the last paragraph on this page.
  … Other than that, there really isn't too much between them, with Online SuperFund being slightly cheaper, but with a few less investment options.

  Additional Fees:

  Company	Corporate Trustee Incorpration Setup Fee	ATO Supervisory Levy	ASIC fee for Corproate SMSF Trustee (pa)
  Online SuperFund	$500	$191	$43
  eSuperFund	N/A	$200	N/A
  Superannuation Warehouse	$950	$200	$41

  Depending one what your needs are, a Corproate Trustee SMSF may be suitable.
  Specifically it allows for there to only be one person in the SMSF (Individual Trustee SMSF require atleast two!), as well as providing additional/cheaper investment options if you wanted (There is no reason for this, but apparently banks look favorably on this type of SMSF when it comes to issuing investment loans etc).
  From the table above, Online Superfund was clearly cheaper for people setting up a Corporate Trustee SMSF.

  • 

    spendinghacker on 11/01/2013 - 23:07

    I don't believe Superannuation Warehouse allow to have a company as trustee. All their plans clearly indicate "INDIVIDUAL trustee:
    http://www.superannuationwarehouse.com.au/free-smsf-setup/sm…

    This means that they are not suitable for single member SMSFs as for those, it is MANDATORY under superannuation law to have a corporate trustee. Just an FYI.

  • 

    Candour on 12/01/2013 - 07:29

    super warehouse had Pay as you go without contracts as i remember
    still the same rates
    useful to have any a/cs to use
    the otehrs get you with the high a/c fees on eg CBA etc in the past.

    ING is a good option.
    unless you now how to invest and trade I have lost time and money kidding myself learning those skills plus keeping up with the SMSF laws all the time.
    too much work even for a retired accountant.

• 

  BluBoy on 11/01/2013 - 22:37

  +8

  Finally… Why did I get a SMSF?

  Being youngish (20's), I had read that SMSF was pointless until you had more than $200k in Super.
  I looked into my super and saw that I was being charged ~ 4% in fees, and it was returning an anualised profit of ~ 4% over the last 3 years (after fees).

  If you had $50k in a Super account, for an invidual trustee SMSF with this offer, you would be looking at 0.89% annualised SMSF administration fees (over the first 3 years) and I could stuff the money into a $0 online savings account earning ~4%pa and be significantly ($1,500+ pa) better off than my previous Super.
  This is quite a simple/tame option of course, but already I am beating my previous super fund.

  For those a bit more brave, you could of course put the money into a Managed Fund and have those guys look after it. InvestSmart again has a great list of Managed Funds available
  Lets say you went with the fourth option in that list, 'Cromwell Phoenix Property Securities', the annualised returns (over 3 years) are 19.15% pa (after fees and as of 31 Dec 2012). There are no entry fees and the management cost is ~ 0.15%.
  So we have the SMSF fee of ~ 0.89% and the managed fund fee of ~ 0.15% producing a return of 19.15%… This is a quarter of the fees charged by my previous Super and almost 5 times the returns (even after the Managed Fund fees!)

  For those extremely brave, there is also the option to DIY. Trade your favourite investment method and see how you go (Although you can't take your super to the casino apparently… So there are some limits in place :) )
  Of course the real bonus with a SMSF is that you can mix and match yourself. Grab a few shares, maybe a managed fund or two and throw the rest into a high interest savings account, property, international CFDs, whatever takes your fancy!

  NB: Most of the sites I have researched over the last few weeks have had a very valid disclaimer… "Historical trends may not represent future gains."
  Make sure you do your own research or speak to someone that knows better than some stranger on a bargains site!

  • 

    Michaelz101 on 12/01/2013 - 14:32

    Tops! I work as an accountant and this is as thorough as you can get!

  • 

    natslovR on 12/01/2013 - 19:49

    +1

    While SMSF can save you money you also need to consider the cost of any insurance you are getting through your current super plans.

    For example, the super arranged through my employer makes available top level TPD and SCI at a significant discount to retail, and if you 'only' have 200K in super than this discount is going to be a noticeable 0.x% on top of your management fees and may make it not worth while.

    I note that originally ATO said that the minimum recommended for SMSF was ~100K, but the general recommendation now is minimum of ~300K, because the flight to SMSF's have forced the super industry to bring down their fees.

    And while BluBoy claims he was paying 4% in fees, I don't know anyone actually paying that much. Even my wife who has no interest in her super doesn't pay anything like that in her companies' default industry super fund - so before jumping in to something like this take a long hard look at what you are paying. It may just be the case of ringing your super fund and telling them you don't want them to pay trailing fees to a financial planner that you don't use any more.

    Moving to SMSF is a big deal, there are risks if you get it wrong, and the costs involved can very easily make it that you were better off leaving it where it was and doing nothing.

    I'm not a shill for the superindustry, and a fee of only $670 for 2 years is very cheap, just please be aware that there is a lot to consider and the consequences for Mod: Foul Language up can be significant.

    edit: and you can't just put SMSF in a normal high interest savings account it has to be one designed for super, which generally have a discount to the retail rate

• 

  [Deactivated] on 11/01/2013 - 22:43

  +9

  +1 for all the hard work you've done!

• 

  spendinghacker on 11/01/2013 - 22:51

  +2

  Another +1 from me too for the extensive research. Good on ya!

• 

  check on 11/01/2013 - 22:54

  Great info, thanks, very interesting. Good work.

• 

  jackofspade on 11/01/2013 - 23:07

  +4

  Alternatively you can simply go with ING Direct Living Super for very low fees and still have the flexibility of a SMSF.

  • 

    spendinghacker on 11/01/2013 - 23:13

    +1

    Agreed but only if you are happy to be restricted to trading only on the ASX.

    If that's the case, I would probably say that ING's product is more suitable for you and one should not bother with setting up an SMSF. This is especially the case if it is going to be a single-member SMSF which means it will be mandatory for it to have a corporate trustee which means an additional one time fee of $500 to incorporate and about $43 every year in ASIC fees.

    • 

      leiiv on 12/01/2013 - 09:36

      What should you trade beside ASX otherwise?

      • 

        spendinghacker on 12/01/2013 - 15:26

        It's not a matter of what you should (as that's investment advice and I am not licensed to give one) but more what you could.

        I trade on the US market with my SMSF and find that it has much better opportunities and liquidity then the ASX. The ASX makes less then 2% of the global investment market and in my opinion, is lacking a lot when it comes to
        things like ETFs and pricing on Options since the options market in Australia is tiny compared to the US.

      • 

        geoffs87 on 13/01/2013 - 12:26

        its about diversification. if you're strong on ASX blue chip, and the australian trading market loses traction, you stand to lose alot of your super. If you look into things like International CFD's and ETF's, you're exposing yourself a little more broadly

      • 

        leiiv on 14/01/2013 - 15:55

        So what are all the reasonably accessible options out there beside ASX? Can I buy any publicly traded share on any country from here? Or is it limited to just US?

• 

  spendinghacker on 11/01/2013 - 23:09

  ESUPERFUND also offers free setup and free first year administration for new SMSFs:
  http://www.esuperfund.com.au/FeeSchedule/SMSFSetup/NewSMSF.a…

• 

  macola51 on 11/01/2013 - 23:58

  +10

  OP, I applaud you for taking the time to think about your financial future at such a relatively young age. I'm at the other end of the age scale and have been operating my SMSF for six years now (and it's now in "Pension phase"). The basic reason you would set up a SMSF is because you LIKE THE IDEA of managing your super, and not because of cheaper fees or better performance than you've been getting to-date. You also have to LOVE paperwork, because there will be heaps of it generated throughout the process. Every burp and sneeze relating to the Fund has to be documented by YOU, and then you will have to provide all that paperwork to the online manager so they can organise your annual tax and audit. If you are the sort of person who can't keep their socks tidy, don't even think about starting a SMSF.

  When you're considering the comparable costs of operating the fund, also factor in your time involved in documenting all those burps and sneezes. The paper trail is definitely the biggest fun-buster about the whole deal.

  Best wishes to you for your retirement :)

  • 

    BluBoy on 12/01/2013 - 00:15

    +2

    Cheers - I agree and should have made it clearer that you have to want to do this, not just be looking for a cheaper option. If you take responsibility for your own super, then do nothing with it, you will end up in some pain! Having read the '$200k' myth, I was surprised that it actually works out better!

    I do some share trading personally and looking forward to purchasing what I consider sensible/boring stock with this, allowing me to play with some more speccies with my personal account :)

    Also, the benefit of the SMSF companies listed above is that they do most of the hard work for you.
    All of them will send out completed forms to sign, and templates to complete to setup the trustee account and SMSF. Then each year, you send them a copy of your bank/fund/broker account statements and they complete the paperwork for you.

    There were cheaper options available, whereby you had to do your own finances, and they just audited it, but I am personally trying to avoid as much of that as possible.

  • 

    niknah on 12/01/2013 - 05:05

    +2

    I've been with esuperfund for a few years. There's not much paper work if you leave it simple, like don't purchase too many different types of investments or else you'll get dividend, interest, etc. from all over the place.

    As BluBoy says, most of the work is done by the provider and the instructions are easy, you just have to sign a whole lot of stuff.

    You're not stuck with the ANZ account with esuperfund, you can have whatever other accounts you wish but they have access to the statements in the ANZ account and they can auto fill your forms for you with that.
    http://www.esuperfund.com.au/investments/allowed_copy1.aspx

  • 

    dealman on 12/01/2013 - 09:10

    +1

    The paper trail is definitely the biggest fun-buster about the whole deal.

    Macola, thanks for the explanation,
    and thanks OP for starting this post, it's awesome to be having a money management discussion with what is possibly the most price conscious group in Australia.

    For those to whom the paper trail is a no no , consider investing in the market directly through your super fund's SMSF lite options.\

    As discussed elsewhere many funds have the options to allow members to trade / invest in ASX shares directly , call your fund for details.

• 

  cashless on 12/01/2013 - 00:06

  +3

  Plenty of food for thought here & as one who looks at the crippling fees charged by my superfund provider and shudders I am one of those who should listen
  Am put off by the need to be so hands on & all the reporting, but will seriously look into your research & make an informed decision
  +1 for your effort

• 

  Click_It on 12/01/2013 - 00:33

  +3

  Not for me personally but anyone who does this much research and takes the time to share with strangers on OB (by strangers I mean one big happy family :p ) deserves +1

  Love your work!

• 

  dealman on 12/01/2013 - 09:04

  Guys,
  A lot of normal industry funds now offer a kind of self managed super fund lite version.

  With Australian Super it is called - Member Direct where you are allowed to directly trade / invest in the ASX top 200 stocks.

  Different companies have different options and fees so investigate your fund about this. If all you want to do is to invest in the ASX directly and are happy to be restrained to the top 200 or so stocks, then feel free to go with a regular superfund with their SMSF lite options.

  The main benefit of these is you don't have to do any paperwork as it's all managed by the fund.

  • 

    Candour on 12/01/2013 - 17:36

    was with aus super for years
    they had the worst platforms then and now
    finally moved out of their to another industry fund
    their macquarie platform was crippled and they refused to let me trade at first, and the new one was so bad I lost money and had to complain to get the trustees to finally give me the market loss I suffered.
    they are not competent in having a 20th century mark 1 broking a/c even now, compared to other brokers who are more integrated with research etc.
    not recommended.

• 

  dealman on 12/01/2013 - 09:07

  +1

  Also everybody, while the SMSF is exciting,
  I'd personally recommend leaving a small amount of cash in your regular market super fund account and buying your life , tpd and other insurance cover through there.

  It makes sense for a couple of reasons,
  1) You are buying insurance out of pre tax or lower taxed dollars,
  2) With some of the bigger funds they have great deals on insurance premiums because of the number of people they have subscribed. the kind of deals that are difficult to find in retail

  So keep a little bit of money to cover the insurance with your regular super fund.

  • 

    monster on 25/01/2013 - 20:08

    +1 SMSF is the way of the future but many current super funds offer outstanding TPD insurance, etc which you may benfit from (effectively at at a discounted rate compared to the rest of the market). Also note that you may not wish to have this insurance but may be paying for this anyway (happened to me).

• 

  lram99 on 12/01/2013 - 11:50

  +3

  Thanks for the post and discussions.

  I have been with esuperfund for the last 5 years and have been very satisfied. But I am not a single user so I can't comment on that aspect. But you can check this by calling esuperfund and enquiring. I have summarised some more points below :

  1. esuperfund will not advice you on how to go about investing - you have to do that on your own. This is perfect for myself and family.Closer to 50's, we watched the share market taking dives and our superannuation investments in traditional managed funds apart from being affected by the downturn, were still charging fees, thereby depleting us more - so it was appropriate to make the switch just to stop it. Now we have slowly built up reserves diversified in shares, fixed deposits and managed funds.

  2. With esuperfund, in case you have specific questions, you place a call, and a consultant always calls back.

  3. While they do start up the ANZ direct saver account, (in may case this was Macquarie Cash Management Trust), this does not stop you from opening high interest accounts like Rabo or other fixed deposits.

  4. The end of year reporting has become better over the last couple of years - as all of it can be submitted online in neatly organised questions and answers format - and uploading the reports. Once submitted, they prepare a report or ask for additonal information before finalising.

  5. Recently esuperfund has given a whole load of new options - for example CMC markets or Interactive Brokers.
     http://www.esuperfund.com.au/shares/HowitWorks/OptionalBroke…. These have to be used with caution and not for anyone with insufficient experience.

  6. If you have a lot of personal shares and are closer to age group like 50's or more, it would be appropriate to do the offmarket transfer of personal shares to your SMSF account - where the dividends are taxed at lower rates. Ofcourse, you have to consider the capital gains /loss inside the personal account.

  Thanks OP for giving the brains a bit of workout. I believe there should be lots more discussions like these and maybe the Government can step in and look at diminishing the super contribution tax when effectively we are taking charge of our own well being in later life.

  • 

    foxxo on 12/01/2013 - 13:42

    I read an article yesterday that said you can now loan your personal income to your SMSF interest free and get the tax benefits (15% max tax rate vs 50% cgt), they also are not classed as contributions so no maximum.
    http://www.morningstar.com.au/smsf/article/clarification-cou…

    You seem to have some experience in this, what's your take on that lram99?

    • 

      lram99 on 12/01/2013 - 14:05

      The link had a few points to pay attention and get clarification - namely whether the "related party" can be yourself. Also the catch is " single acquirable asset ".If both assumptions are correct, I can loan myself say 25K then, I have to buy a single share for this amount and then make arrangements to return the amount at less than market rate at a later date. Alternatively, put it in a fixed deposit and not pay the loan interest. mmmmm Will have to watch this space for some other experienced person to clarify.

      • 

        CiA on 12/01/2013 - 17:33

        Hi,

        I have a fair bit of experience in the SMSF world (currently working with one of the top SMSF companies) and the setup costs of a related party loan to an smsf will be at least $5,000 not including any financial/legal advice.

        If anyone is interested in going down the path of setting up an SMSF and wanted the full service more then happy to help out.

        Cheers

• 

  iloveLucas on 12/01/2013 - 13:12

  Definitely the most helpful and informative post with useful comments I have ever seen on Ozbargain!

  I love this place!

• 

  sydboy007 on 12/01/2013 - 17:06

  Just to clarify esuperfund do not ONLY offer Commsec as the trading account. You can also use IB or CMC if you want to trade in US stocks or CDOs etc. IB trades on Aust stocks are quite cheap, but carry a bit more risk in that your shares are no chess sponsored so you in effect you are an unsecured creditor and could have issues should IB run into trouble (think Tricom equities in 2008)

  I took up the ebroking account with them as the trades are cheaper - from $19.95 - and they provide live data for free. Also quite like the market depth info they provide - gives you an idea of the underlying buy / sell action.

  It's good to see more of these kinds of budget priced DIY super accounts being offered. I see the whole ticket clipping financial services (sic) industry as nothing but leeches.

  For anyone who is willing to understand and take on the demands of being a super trustee, then a SMSF is the way to go. I like having 100% visibility of where my money is and where my performance (or lack of) is coming from.