Costs to to set up and run a smsf

Hi there
I was after a couple of opinions on the cost to set up a smsf

I approached an accountant about setting up a smsf ,he answered all my questions and reccomend i speak with a financial planner to map out my path going forward
I had the meeting , i have already i good udea on how i would like it to lok.
She was impressed with my plan and very happy to work with me

I then had an email me it would cost $7000 to set up my own thoughts and $6000 a year every yr to review
A further $2000 to an accountant to set up and slightly less each yr to over see

Im happy with the accountants fees , but do you tgink the financial planner is over charging me or is it about right

I have approx $1,200,000 to invest

Thanks for reading

 

Is the financial planner developing an initial financial plan for you, then providing ongoing annual financial advice?

 

Its my plan but she liked and will give on going support and advice

 

Why do you need an SMSF?

 

Is that something you need? You don't need to engage the financial adviser on an ongoing basis.

 

That is ridiculously high

 

If you are not getting advice from the Financial Planner, then there should be no ongoing fee from them, if they are fee for service. Once the service is done, that's it.

 

We’re with ESUPERFUND - fees are about $1200 a year. We have our own share portfolio in it and have bought property. IF you know what you’re doing then it’s an option. Keep in mind, there is no one to talk to, it’s all via email.

 

So setup is $9k. WTF. The annual costs for the accounting, audit etc may be ? Lets say $3K. Then add the FP fee so its $9K. That equates to a fee annually of 0.75% which is very high v industry funds. I would be wary that the FP / Accountant lack independence and may both be eating from the same plate. The very essence of a SMSF should be that you seek control and so why have a FP to manage this ?

Have you considered self managing and engaging the FP if and when you need?

 

the setup fee needs clarification as sounds like that will include a financial plan which may be a requirement for the FP to then set it up for you. They have a lot of rules about what they can or cannot do.
The ongoing fees also what to they include? advice plus buying and selling investments etc.
compliance is not easy so that to be covered by either the FP or the Accountant.

We went through a FP to set ours up - he organises any accounting requirements , like tax returns as well as the auditing - we review and sign off.

The ongoing FP advice includes all compliance requirements and financial estate planning. Buying and selling stocks + Research on stocks and Tax minimisation plus annual review plus general advice when needed. 2.4M under mgmt plus advice on IPs (another 2-3M) and when to sell and how best to get funds into SMSF.

Fees for FP are currently 10K per year indexed. I think initial setup costs were about 2K.
the annual tax prep for the SMSF is about $1500.
As I understand it you can’t just engage a FP when you want them for something small and say pay on an hourly rate. The rules are changing though as there is a huge need for more options.

not always. It provides a platform for you to invest your money in different assets but it can still be managed by a professional. You have to have a balance that justifies that expense though. If you just want to set one up to invest in property then it would not be warranted although you need to know what you are doing as it’s very expensive if your fund becomes non compliant.

 

There is no legal requirement for financial advice to setup a smsf. You can instruct that as a decision. It may be different if you are unsure or have no idea. If all investmnets are FP managed then the SMSF viablity must be considered in the advice. It may be far cheaper to use a wrap super platform that the adviser recommends The SOA should have considered and compared that or why it wasnt prudent. eg Wraps limit some choice to aproved investmnets and defined limits. A SMSF allows a far broader range of investmnets incl wholesale etc. I have a client with a large fund who has gone to private loans and 20% yield. For a % of fund. No wrap allows that...He also has several direct properties incl business premises.

Estate planning is a legal issue not a financial planning issue. $2.4m means the "fee"comparison is approx 0.30%. Thats reasonable. provided the FP service delivery is productive

 

Esuperfund for me too, $1,000.00 per year for everything. Stake Super is another online, low cost platform. If you use the 'search' function there's some discussion on this forum by some happy customers.