Australian Super member direct

If you use a SMSF administrator even a discount one then there’s bugger all to do. When I say SMSFs can be a pain at times it’s mainly referring to major rule changes which might require some attention. As for admin it’s usually just a couple of hours at most around tax time. Because I save everything online throughout the year it’s ready to go come tax time.

@oracle uses a cheap SMSF discount administrator and I don’t think he spends much time on admin. @oracle?

 

Correct.

Also having simple portfolio of 2 ETFs with hardly any trading helps.

I use eSuperfund and happy to recommend them

Cheers
Oracle

 

Rough costs Oracle?

EDIT: NVM, just checked their website and first year is totally free and $999 p/a afterwards.

 

Hey @Zenith Chaos

You don't have to use a SMSF to get individual tax treatment. The member direct options are individually tax tracked. Aust Super, and Host Plus both have self directed options as do others including Q Super, which will mean Sun Super probably get the functionality if they merge.

The thing is you can't switch funds down the track without realising your deferred capital gains, so If I went with a superfund self directed option I would be picking the biggest and best fund to stay with until retirement. A few years of good capital gains you will see first hand what I'm talking about and be reluctant to incur a capital gain to switch super funds.

Vangaurd without a doubt in my mind will go individually taxed accounts when they launch, they may even with a bit of luck, write a white paper to explain more clearly the advantages of individual tax treatment for passive investors. I would be keeping a close eye on developments here for ideal structures and hopefully cheaper admin and maybe even cheaper transaction(brokerage) to invest. Could put the wind up traditional funds and even make SMSF's redundant except for more complex, property, estate etc reasons.

If you really want to go a SMSF, (and I wouldn't think about it unless you are likely to go over the cap or have business property, estate planning reasons etc.) I would look at eSuperfund type options if possible. I've got about the most hands on DIY you can go. It costs about 1K a year including supervisory levy, software and audit. Everything is pretty automated, including the time for a visit with the Auditor I probably spend 8 Hours max a year on it.

 

We are setting up via greenfrog SMSF

 

I did a lot of research into eSuperfund type options and then went ING direct, then moved to Sunsuper in disgust after the ING fee changes.

If Sunsuper offered a member's direct option would it be equivalent in tax treatment and final results as SMSF for someone reaching the cap?

Reaching the cap would depend on how early I pull the FIRE trigger. Either way, to reach the cap I'd need to transfer some or all of the FIRE pile as preservation age approaches.

Apart from the Cayman Islands option I believe getting as much into Super is probably the best from a tax perspective, please correct me if I am wrong.

I know very little about all the rules and loopholes of superannuation and I want to keep it that way for as long as possible, so apologies if these sound like newbie questions, because they are. Why can't they make it simple? Is it just a way to keep the gravy train for the advisors?

Thanks again.

 

Poking around in HostPlus member direct product (Choiceplus) and it is slightly cheaper than AusSuper by the looks.

$258 in portfolio administration fees (vs. $395 AusSuper)
Brokerage similar ($5 more for $5k parcel, $10 less at $10k parcel)

Still comes in miles under the minimum SMSF costs (at least for smaller balances) and avoids the expensive DTL issues of the pooled accounts.

After some desk research most of these direct invest accounts have a cap on the total holdings in LICs/ETFs (e.g. around 80%) and a cap on a single holding as % of your portfolio (e.g. 20-25%). Something to keep in mind (e.g. might need to spread across Vanguard and Betashares ETFs for example if doing a vanilla 50% AU 50% International target allocation)

I think the key with these member direct options is being very clear about your strategic asset allocation before you dive in.

A lot of chit chat and comparison of direct invest accounts here.

 

I did try Australian Supers member direct, but then moved to SMSF with eSuper.

Even though my wife and I don't have very large super, the additional fees associated with member direct and two separate fees for both accounts seemed to make eSuperFund worth while.

I also like the fact it was more transparent with the trading accounts.

 

What was your experience like with the AusSuper trading account? Is it all through their own interface or some third party like Commsec?

 

eSuperFund is more transparent because you just get a commsec broker account.

Memeber Direct, it is very similar, you get dividends, buy/sell, SPP, but nothing is in your name and never get any documents.

 

I was in Member Direct for a couple of years, got out a couple of years ago.
I hated the interface!
Each share you bought had a 'tile' you had to flip over to see the price/value/recommendation/profit.
Give me a nice clear table any day.

 

Any updates on this Chris? I'm still on the fence here (I'm early in accumulation phase).

Leaning to the direct ETF investment products, but would love to see a clearly written response from one of these funds (not getting my hopes up).

 

Do you need to fill out W-8BEN form yourself if you buy VTS in member direct? or AusSuper will do it for you?

 

AustralianSuper will do/(has done) it for you/(them). The holding will be consolidated into the total holding of VTS for all members, it is not a separate trading account for you.

 

@rizzle nothing significant.

I’m still with SunSuper equity index options. Attempted to isolate the impact of DTL (in this thread or somewhere related, can’t recall off the top of my head) and hit a few issues. I did get another response from SunSuper but pretty clear they are not keen/able to attribute impact of DTL per option at this stage.... I’ll update the data set in early Jan but my sense (and that’s all it is) is that the actual impact is a fair bit less than the theoretical max impact.

I’m definitely not going down the direct invest option with one of the industry funds - too many restrictions and negatives for my liking,

I’m assuming we’ll hear more from vanguard in the new year on their new super product and hoping individuals tax treatment might be part of the offering. We’ll see,

If I change anything at this stage, I’m most likely to go the low cost SMSF route, as it will work well for us, but not something I’d recommended for everyone. Refer to previous posts from more experienced posters.

Definitely no need for me to rush anything, but if I do decide to change course it will be implemented in 2020. Asset allocation / underlying investments won’t change though.

It’s been a little while since I looked at this so might be repeating myself.

In the meantime bought a copy of Grant Abbott’s SMSF book before we left for holidays a few weeks ago. It’ll be on the veranda at home waiting for my return - that is unless the Brisbane storms have ruined it.

 

For anyone that was following my previous posts on comparison of SunSuper and Vanguard Wholesale australian equity and international equity (unhedge) performance, I've just updated the data through to 31st Jan 2020.


Quite interesting to see the difference in 12 months performance in particular - not sure why this would be - who knows exactly how the pooled funds calculate unit prices and what skull duggery is going on. Source data / formulas attached so you can check for yourself. 10 year performance difference is a little less concerning, but over longer periods this sort of thing adds up..... hmmm.

 

Wowee. That's a chasm of difference. I'm sure if questioned on it we would not get a clear response from Sunsuper.

Vanguard superannuation cannot come fast enough.

 

Interesting the turnaround in the 1 year numbers from your last post, they now fit in with the rest and what would be expected because of the pooled accounting for deferred tax liabilities. Still has me confused why the tax free pensions are not closer to the Vanguard equivalents. Crediting rates by pooled super funds all seem to be a bit of a black box even for the customer who wants to understand - with the level of transparency, its lucky everybody in the financial industry is a beacon of honesty striving for the upmost in fiduciary service to serve the unwashed masses.

 

+1. We're not doing anything with ours until we see what they offer. Impatiently waiting.

 

How do we know Vanguard won’t use the same pooled accounting method?

This stuff confuses me I won’t lie, but hopefully they can offer some type of super account where you’re simply investing directly in their ETFs. That would seem like the cleanest tax outcome for each individual, unless I’m missing something.

Be interesting to see what they come up with.