Looking at setting up a SMSF – Max. $1,000 Annual Costs

Highly recommend Jeremy Gordon from directdocs - one of the best in the business

Cheers Ivan

 

Have a look at esuperfund.com.au. Setup & first year free and $999 annual fee.

My wife is a SMSF specialist, I am an ex-auditor and we still use esuperfund. Much easier and not worth the effort of doing it ourselves.

We have been using esuperfund for ~9 years without issue.

 

We looked at this and they have their own limitations, and preffered arrangements.

 

@sillydad is Class Super available for trustees to subscribe to directly like BGL, or is it only available to SMSF admin/accountancy businesses for 'resale' as part of their administration services.

Also I know you've balked at the cost of BGL and are looking at lower cost record keeping but something to consider is that your super balance is likely to continue so grow making it relatively more attractive and save the hassle of changing administration over in a few years time. I believe @dunno uses BGL Super and was looking at other options. He might be able to comment.

I am not a SMSF trustee so really have no business commenting but I was looking at icaresmsf which uses BGL for administration. It's unlikely to be of interest to you at this stage but thought I'd mention it anyway as another low cost option for others reading along. From memory a lot less limitations and constraints than say esuperfund.

 

Class is not available to trustees but they can be given app access.

Class software can only be licensed by wealth professionals. Trustees and investors can have can still have their own 24/7 secure online access, from any device. This means you can quickly view your investment income, performance, valuations, asset allocation and more – wherever you are. Having this up to date access to your data keeps you in the picture, and helps feed your investment decisions.

BGL and Class are strong competitors with similar pricing.

 

A bit of an update

This week was in touch with Jeremy at DirectDocs, purchased the set up for Corporate Trustee, that includes Spreadsheets for accounting/tax returns. Found him pretty good.

I was also in touch with BGL – the initial cost is $400, but ongoing annual cost is $200 (I thought this was costing $400 annually)

Reviewed these with OH (she agrees with Paul’s comments above) – and decided to change how we account for investments – currently paying ShareSight subscription $25 a month for personal portfolio (with a bit over $100k) – we will cancel this and use spreadsheets for that, and take up a BGL subscription. Ongoing SMSF administration costs are going to be $750, with the accounting/tax bit now easier.

Only insurance with my current super is Life – linked to Zurich and we will get our financial planner to update that.

Thanks all for comments/feedback.

 

BGL will replace all your sharesight and there is no need even for excel.

The important thing for BGL is the initial setup will be like a trial balance. The asset costbase and original cost date will be entered. Any tax deferred elements from the past or past costbase changes are reflected to the adjusted costbase at this point. Thereafter BGL will handle all adjustments, revaluation etc. Its really really easy.

The insurance side is not quite so easy. Many insurers may not allow a changed owner of the policy. Some allow it once etc. Important that the policy owner is the SMSF Trustee. Fund cannot just pay the premium otherwise. If the present policy is in a fund it 99.9% wont be portable to a smsf. Expect a higher cost...check this FIRST. Premiums can and do double and its cheaper to find a replacement policy IF YOU CAN The insured benefit is entered in the member screen and so annual member reports will show a death benefit incl of the insurance/ TPD or death etc

The TopDocs fund rules need to be read up and understood about making binding death noms etc

 

@sillydad any chance you could update on how things went for you with directdocs and BGL simple funds 360?

 

I have been planning to update this thread, thanks for the reminder.

The transfer from AustralianSuper was smooth - we have insurances separate from super except life which our financial planner organised transfer to SMSF before we moved funds.

Key updates:

1. Looking back its a very good thing I posted this thread and listened to Paul's advice to use BGL. BGL software has been beyond my expectations.
2. It took sometime to learn and understand the nuances of the system (but they have lots of Youtube video's, manuals, a dedicated community discussion forum and very good customer service).
3. What I found incredible was the automation of Corporate Actions, for ASX shares and managed funds/distribution tax automation. It is accurate and saves time, in addition to providing back up down the line. They have a good algorithm that does automatic matching and posts entries.
4. The tax stuff was even easier - granted all entries were posted correct - I was able to do this myself (OH is a tax accountant who reviewed) - and online lodgement of the SMSF return was smooth. The software doesn't automate overseas dividends - so that gets posted manually.
5. In terms of time - if I was to do this once a year I guess it would take may be 5 - 6 hours to prepare the accounts/admin.
6. Used a CA audit firm all good.
7. They have a very good app.
8. Costs around ~1k - because of the ATO levy paid twice first year. Ongoing costs to be $900 annually.

Jeremy @Direct Documents was very good. The paperwork was straightforward - only thing we will need to keep an eye on to update is the Binding Death Nomination Form, may get a lawyer look into this at some time.

All up I am happy we did this. I am trialing BGL Simple Invest 360 at the moment - their new product for family trusts - which will do both investments and IP on same platform. I can switch between SMSF and family trust investments using same desktop log in/app. If they charge $220 annually it's going to be cheaper than what we pay Quickbooks - and much more family trust related reporting plus automation of corporate actions.

Too soon to comment on investment performance but the investments are a concentrated active portfolio (direct equities 55%, managed funds 35% and rest ETF.)

 

@sillydad Thanks for the update. For a two member fund, in accumulation mode with very simple investment strategy of only three asx listed index funds (and no plan to deviate from this for 15 years), do you think bgl simplifies much vs directdocs spreadsheet? (Other than having to manually enter data from 4 buy contract notes, 1 distribution tax statement p/a and approx 40 member contributions p/a)

 

Initially this was my plan - I used to have a similar spreadsheet for investments out of SMSF - BGL simplifies the process - and the opportunity cost of $220 is worth it.

You may struggle to get an auditor if you are using excel spreadsheets - when I was looking for one, one of the questions they asked was what software you use. Because they can ask for specific reports from BGL or Class.

Used to find it tricky tracking reinvestment residual account in excel - this is all automated. I have attached a sample report from BGL.

 

Great feedback. Thank you.

 

Speadsheets and retail software are 100% unacceptable for SMSF reporting and certainly cant produce on the fly tax returns. Throw in compliance docs like investment strategies, pensions and actuarial reports, nominations, rollovers in and out and I would argue anyone NOT using such a solution has a problem. (eg An actual certificate used to take HOURS to do. I now can do it in 30seconds and it immediately reclacs tax and processes all entries). The time / cost saving is massive. The auditor is required to ensure that the financial reporting complies with applicable accounting standards. And it correctly provides member reporting and data.

"Old school accountants" who use old school general ledger or god forbid, MYOB , QB etc to dummy financials should not be practicing in the area of SMSF if they dont use best practice. The BGL / Class solutions are first rate. The cost savings EXCEED the annual costs by a factor of tens or hundreds of times the cost.

I have used BGL for over 2 decades. Every month it gets better. I regularly find a suggestion and its often soon in the software. One of the smartest software companies imo. Made in Melbourne.

 

Is an annual resolution of solvency necessary for a special purpose company as trustee of a SMSF (or $2 companies ATF family trust) or only for companies which are trading companies?

 

Yes
CORPORATIONS ACT 2001 - SECT 347A Directors must pass a solvency resolution after each review date