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Should I Set Up an SMSF? | SMSF Costs

Should I set up an SMSF?

A question we hear very frequently from clients is whether an SMSF is right for them and as with everything in accounting the answer is, it depends. We work with clients to examine their strategy behind starting a Self Managed Super Fund and see whether DIY super is right for them. Some clients do it as a cost saving as the costs of running an SMSF although higher for small funds are often cheaper for larger funds that a lot of other options. Often clients are less worried about direct cost savings and more interested in the control than an SMSF allows them in determining their retirement and their future including the option of diversifying out of just equities and managed investments and into the direct property space.

We are happy to meet with new clients considering an SMSF and look at the options and whether it suits your particular needs. If you do decide to go ahead we then work with local Adelaide lawyers on a quality SMSF setup to ensure it meets SIS Act requirements and has the flexibility to achieve your individual goals.

SMSF & Wealth Creation

Bartley Partners have dedicated SMF accountants on hand who specialise in working with clients to set up and maintain a Self Managed Super Fund (SMSF). All SMSF set ups are done in tandem with some of Adelaide’s top legal professionals to ensure your structure minimises taxation, provides for asset protection, and factors in your estate planning needs.

As part of your retirement and wealth creation strategy, you may consider setting up a Self Managed Super Fund to allow you the greatest flexibility available under the law to invest in different asset classes. Common investment options include direct property (residential or commercial), indirect property, shares, managed funds, bullion, and index funds.

There are a plethora of strategies related to Self Managed Super Funds available due to the tax differential available — compliant SMSFs are generally only taxed at 15%, well below other investment vehicles.

SMSFs are regulated by the Australian Taxation Office and allow up to six members (often used by families to invest together for retirement). There are duties imposed upon Self Managed Super Funds, such as legal duties in order to run the fund correctly and purely for the provision of retirement benefits, set up an investment strategy, and to keep full accounts that are reported annually to the ATO.

Costs related to running a Self Managed Super Fund

  • Accounting fees starting from $500 + GST per year, depending on the size of the fund, the information presented and the transaction level.  By comparison a 2mil fund  might be as high as $800 without direct property. Note, the more direct property a fund holds the more expensive the work will generally become as it is not as automated as shares/managed funds.
  • Class Super Software costs $250+GST per year and allows us to setup automations to streamline the processing of your returns and also lowers your audit costs considerably. Class talks directly to your bank account, share portfolio and managed funds allowing us to lower your costs via automation of manual entry.
  • Audit fees from $300 + GST per year, as Self Managed Super Funds are required to receive an annual audit.
  • The Australian Taxation Office (ATO) charges an annual SMSF levy of $259
  • An annual ASIC fee of $53 for the corporate trustee company.

Considering the costs, it is only worth self managing your superannuation if you have sufficient funds in your super to justify the costs involved, and to ensure that it does not cost significantly more than a standard commercial fund.

If you are unsure whether you have the funds to justify a SMSF, come in and have a chat with one of Bartley Partners’ accountants to determine if this entity is right for you and your family.

Call us on (08) 8338 1033 to discuss setting up and managing a SMSF in Adelaide.

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