The costs of setting up and running an SMSF vary depending on, among other things, your circumstances, super balance, investment strategy and how you choose to manage your fund. The more complex you make it, the more it is likely to cost.
However, with this said, the difference between an SMSF and a retail or industry fund is the fact that SMSF’s operate on a fixed annual fee, as opposed to an ongoing percentage of your fund balance.
In certain cases, SMSF’s have lower associated fees compared to other super funds.
Future Assist Accountants administer SMSFs on a fixed annual fee, as opposed to most funds that operate on a percentage of your total balance. With Future Assist, the more your super grows, the more economical an SMSF will become and the more expensive it then becomes to leave it other super funds who charge on a percentage basis.
The major variation in cost differences will be whether or not you wish to borrow funds and invest in property with your SMSF, as this will require additional setup factors like, creation of a bare trust for limited recourse borrowing as well as possible finance fees associated with your loan.
Typically running and SMSF will have costs associated with the following 3 steps:
1. Initial set up / Company creation and ASIC fees
2. Annual Audit fees – these can be charged annually or monthly
3. Ongoing accounting and tax returns fees.
Generally, most SMSF’s operate on a fixed priced fee structure as applied by your professional adviser(s).
Ongoing fees charged by professional advisers can also vary greatly from firm to firm and it is important that you do your research and confirm their respective fees.
It is important to discuss you SMSF investment strategy with a licensed financial adviser before taking into consideration the costs of running your SMSF. If the costs of running an SMSF are your first concern, then you are looking at an SMSF the wrong way.
Speak to an SMSF adviser at Future Assist and lets work out:
– Your retirement goals
– Assess your super balance and contributions
– Years you have left to retirement
– Then it is time to discuss your risk profile and preferred investment class.
After the above has been discussed, we can then determine what an SMSF will cost you to operate and if it would be worth while compared to other options related to your superannuation.
A SMSF may not be suitable for your circumstances and it is important to obtain advice from professional and appropriately licensed advisers.
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A SMSF could very well be a more appropriate way for you to reach your retirement goals however there are also a lot of risks and extra responsibilities associated with a SMSF.
As the regulatory & governing body of SMSF’s, the ATO suggest that you consider appointing an appropriately licensed professional to assist you with setting up and running your SMSF.
Prior to setting up an SMSF, we highly recommend that you speak to an appropriately licensed professional to ascertain whether a SMSF is suitable for you and your retirement goals.
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Disclaimer: This website is not designed for the purpose of providing personal financial or investment advice. Information provided does not take into account your particular personal financial or investment objectives, situation or needs.
You should assess whether the information on this website is appropriate to your particular personal and investment circumstances and should do this prior to making any financial or investment decision.
The information on this website is not a recommendation to invest in any investment or financial product. You should seek professional investment advice before proceeding on any information.