Low cost DIY SMSF for an ETF portfolio

CHESS sponsored if ASX only so you can always transfer to another broker and SMSF Admin + Audit

 

Following the thread with interest @Hockey Monkey

 

There was a vague reference to additional fees in StakeSMSF - it seems if you need to do something more than the basic (eg... if you ask a question?), you will jump straight to the $2640 option (as I can't see any other fee schedule) - is that correct?

After the first year of free StakeBlack do you then have to pay for that (even if you don't want it?)

Do they handle pensions?

 

Just got off the call with the head of product at StakeSMSF.

Going forward, they will be using an ANZ based Airwallex account rather than Macquarie that is directly integrated into Stake. Think global currency account. He assured me there were no transfer limits for simple Cash Account -> Stake Equities purchases and that it is all built on the new payments platform so should be fast.

I've signed up for a corporate trustee SMSF and will try them out with my eyes open that it is a Beta with many things still to be worked out. So far signup and electronic signing of documents has been extremely easy. Now the wait for ATO and ASIC begins.

By the time the company registration goes through we will likely be in October at which time ASX trading will launch. StakeSMSF Beta users get priority access to ASX trading when available at $0 brokerage until 2022, so a good way to skip the waitlist.

If for some reason it doesn't work out, assets are in CHESS under my own HIN and it was ultimately a fairly low cost way to get a company registered.

We touched on pensions and at the moment I got the impression it all falls under the $2640 "Plus" option but they need to review the fee schedule and work out pricing for non "Plus" users.

 

There might possibly be issues with other providers (banks etc) if you've only signed the original documents electronically.

Does the trust deed say anything that suggests it is Stake specific or limits you to Stake?

 

We received an Adobe Signed pdf of the establishment documentation. Not sure if other banks or brokers would accept it. I would hope so, otherwise could we add wet signatures later?

There is nothing in the trust deed that says it is Stake specific. There is a resolution to appoint ASF Audits as the auditor, but that's about it.

Some terms and conditions Terms and Conditions - SMSF Administration Agreement - StakeSMSF

 

Sounds like you spoke with Kris Kitto

 

Less than 48 hours later, our Stake SMSF now has a Trust Deed, ABN, TFN, ACN, ANZ Bank Account and US Trading Account (that I don't plan to use). Now waiting for ASX trading early in Q4.

 

May I please ask what is your balance going to be fir SMSF? I have read few articles where they emphasise on having good amount to make it worth and I just do not want to open SMSF for the sake of it although I do see the simple index investing benefits but our balance be approx 230-240K and after fees and charges be bit less

 

@240k, I calculate the total cost of an SMSF at 0.65%. You might want to stay with a pooled fund until the balance gets a little higher, although then Stake will cost $990 after the Beta

$1551 Total cost
$770 - Stake
$259 - ATO
$56 - ASIC
$430 - 0.18% MER of VAS/VTS/VEU 20/47/33 including tax drag
$36 - Brokerage

 

Doesnt it concern you about a SMSF service provider that supports and encourages a trading platform ? This is very concerning. Imagie if Commsec setup smsfs this way. ASIC would bollock them.

Electronic signing of the deed and the company docs is actually non compliant. But then they didnt give legal advice. Did the legal firm that prepared the docs indicate electronic signing complies ? Tip Company registration takes a hour or two. The SMSF ABN and finalisation typically up to 10 days. Until the SMSF is established the fund cant receive funds. This is very dubious.

Beta... How many times have I heard that ? Here today and then....ASIC shuts them down.

 

It concerns me that other people may blow up their retirement by trading, however personally doesn't concern me as I'm not a trader and will just buy and hold index ETF's for in a CHESS account and low cost brokerage.

My situation was probably quicker than normal as I had a previously established ABN that was already complying but never funded so Stake adopted it. Others may take a little longer before the fund can receive funds.

Some info on the trust deed.

The doc itself was obtained by NowInfinity who appear to be a subsidiary of Class Corporate Compliance Management Software | NowInfinity

The docs and the manner of implementation were reviewed by Mosaic Tax Legal Home - Mosaic Tax Legal - Business and Personal Law Matters Sydney

From StakeSMSF | We've answered all your questions in our FAQs

Can I sign my SMSF trust deed electronically?
Yes.

Although the temporary legal provisions in place (due to COVID-19) enable a company trustee to execute a trust deed expired on 21 March 2021, there are draft law changes that are expected to come into effect in mid-2021 which makes these temporary provisions permanent. The legal advice we’ve received has confirmed the validity of any SMSF trust deeds signed electronically between 21 March 2021 and when the relevant law changes come into effect.

Both the ATO who regulates SMSF and the institutions we work with accept the validity of electronically SMSF trust deeds; however, we can provide the unsigned PDF versions of your SMSF documents upon request if you decide to sign via wet ink handwritten signatures.

 

s10 of the Electronic Transactions Act 1999 (Cth) (ETA) applies to validate a document executed electronically provided the conditions in s 10 are satisfied (including proper identification and confirmation of the intention of the person signing the document and consent to the use of an electronic signature by the counterparty).

However, s 10 is specifically excluded from applying to the Corporations Act by item 30 of schedule 1 of the Electronic Transactions Regulations 2000 (Cth).

Arguably, the specific exclusion of the Corporations Act from the scope of the ETA is extrinsic evidence of the Commonwealth Parliament’s intention that a company should not be able to execute a deed (or an agreement) electronically.

Further ....Australian law does not recognise the validity of a deed which exists in electronic form eg saved in PDF format. However it may satisfy a court as the existence of a deed that was scanned provided other conditions are met. The common law requirement that deeds be on ‘paper, parchment or vellum’ prevails, meaning that deeds purported to be executed in electronic form with eSignatures are not valid.

Witnessed documents are problematic for electronic signing as how can a witness ......witness the making of a electronic signature ? The NSW Conveyancing Act ignores that issue.

 

Would you suggest a wet signature to be on the safe side?

This page indicates electronic signing of deeds is ok. Electronic signing and online witnessing of legal documents

 

My legal advice to people is to not electronically sign deeds, even if allowed

 

I was surprised the Stake didn’t require witnessing. A previous individual trust deed we signed certainly did.

Some more info on electronic execution rules by state A Quick Reference Guide on Electronic Execution of Deeds, Agreements, minutes and resolutions

specifically mentions in Victoria electronic signing is ok except where witnesses are required

 

This is from a online youtube video as a guide created by an accounting company so settibg up SMSF is just under $2K

 

Hi mate, what about if we want to buy one IP cash and then put ongoing super contribution or other available funds into equities? (Company/corporate trustee setup)

 

$2K is a bit high in the current market. Stake's offering by comparison is $770 for Corporate Trustee setup and $0 for trust deed.

Stake is not unique though with many low cost offerings out there. For example iCareSuper was my 2nd choice at $880 for Corporate Trustee and $0 for trust deed. Their annual admin and audit cost is higher though at $924 ($77*12) vs $770 for Stake.

Once the Stake Beta ends and they jump to $990 admin + audit, iCareSuper would be right up there.

SMSF Setup, SMSF Audit - iCare SMSF

 

Don’t see any issue with that. You can always check with Kris Kitto. Nice bloke