Low cost DIY SMSF for an ETF portfolio

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Hockey Monkey, 15th Sep, 2021.

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  1. ChrisP73

    ChrisP73 Well-Known Member

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    Maybe the implied threat of a complaint to AFCA was motivating :)
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    From 1 October super stream is mandated for all SMSF rollovers from APRA funds. The SMSF MUST have a ESA (electronic service address) which the ESA provider also matches to a unique fund identifier.

    The "statement" rule is a bit strange as a newly formed smsf may not even have a statement. Other forms of proof that contain the same information appear not considered and the reference to a "bank statement" may be limiting. eg Not all entities are "banks" (ie bank statement) and some accounts may only generate a statement twice a year. Perhaps a future change or protocol variation may modify this. Superstream V3 encompasses some new protocols that seek to verify and limit fraud that also share data in real time through the ATO. The ATO acts as a clearing house for matched rollovers using superstream3. If unmatched no payment can occur. No rollover is permitted outside superstream. The fund would then refuse the rollover.

    That said the protocols ask a fund to obtain proof of account and the ATO example is a bank statement as this is considered more reliable that asking for the details in other forms. These are entered by the APRA fund which should match with the superstream side of things. It is a blind process so what is sent must match or it reports as invalid. Hence hacking is problematic. A SMSF that has registered for superstream wont always have a validated bank account (which is invisible to all) which occurs after lodgement of the first tax (perhaps). Therefore the protocol calls on the APRA fund to obtain suitable proof. This limits errors. When they submit to the ATO if this is a known bank account it should validate as a handshake in real time. If no account is known the ATO will seek to validate the account with the financial institution which involves a delay and also matches with the SMSF member and the fund details (eg if the member is not a fund member or trustee in their view it may fail). Non-resident rollovers to a SMSF may also fail. Once confirmed by the ATO the APRA fund receives a handshake. The ATO updates its records after the handshake verifies the account.

    AFCA would be unlikely to oppose a fund following law.

    SuperStream Rollover v3
     
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  3. jmy 82

    jmy 82 Member

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    Hi Paul,

    I notice something new (and I like it actually) when I did the latest rollover into our SMSF.

    Before I was expected to punch in the rollover transaction details (i.e. Element taxed in the fund, tax-free component, etc).

    On this latest one (done after 1st October), I noticed that it popped into my eSuperfund dashboard with all the details populated already.

    Saves us the hassle but yeah - weird that they asked for a certified copy of our bank statement. I had no issue as the SMSF has been in existence for a few months but it is just a slight hassle to get this organised (especially that I don't have a printer and doing this on a lockdown can be tricky).
     
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Yes the new process is now integrated into software and a electronic RBS is received. Mind you it was a 10second job to key in the elements before. Assuming the software setup is complete. Many use the old AUSTPOST ESA and its not presently compatable so some fiddling about to move the ESA from AUSTPOST so it works. I have foud how to add bank accounts so rollovers happen - Not sure how esuper address that as it NEEDS a tax agent to do that in most cases. The rollover process is basically a one way extention of the ESA contribution process whcih also allocates contributions in the software too. Thats all part of super stream. Soon it will even be two way so a rollover from a smsf to a industry fund will be same and may need to be done within the SMSF software platform (if possible). For small funds this is just becoming increasingly more red tape however.
     
  5. jmy 82

    jmy 82 Member

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    All those who have an SMSF - did you save a copy of your originally signed trust deed?

    I probably have thrown away the originally signed document but i do have a copy of the the scanned document - will i be in trouble down the track?
     
  6. TickerHound

    TickerHound Well-Known Member

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    How are you finding StakeSMSF, Hockey Monkey?
     
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  7. Hockey Monkey

    Hockey Monkey Well-Known Member

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    All good so far. Kris and Solly at StakeSMSF have been very responsive and a big help
    - Getting set up and rolled over
    - Creating binding death nominations
    - Recording return not necessary (RNN) for my first year where I hadn't funded my account

    The Stake ASX broker side of things has worked great. Individual trades are limited to $100k which meant multiple trades rolling over. I've reported a couple of bugs but nothing material to trading itself.

    The only downside so far is that pension mode requires the more expensive ($2640 p.a.) Plus account. Kris mentioned they would be looking at this and I have at least 4 years before it becomes an issue for Mrs Hockey Monkey.
     
  8. TickerHound

    TickerHound Well-Known Member

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    Thanks HM! Is the $100k trade limit a maximum or minimum? Also, do you need to know worry about any yearly admin or is that taken care of by Stake?
     
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  9. Hockey Monkey

    Hockey Monkey Well-Known Member

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    $100k trade limit is a maximum. Obviously not an issue day to day, but was something I hit with rollover. Easy to break up into multiple trades, particularly when brokerage is free :)

    I understand the yearly $770 admin will be funded out of the SMSF, so you would need to ensure cash is available. Same goes for paying tax etc. It is unclear how this will work with the AirWallex account yet. I'm sure they will have it ready when the time comes.
     
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  10. No_Limits

    No_Limits Well-Known Member

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    Today I spoke with Kris. He said that the option to go off-platform under the $2,640 account will be removed. Whilst that doesn't affect my plans, it does strike me as a little concerning this flexibility will be removed.

    I'm with Aware super, and Kris says they are refusing to rollover to Stake SMSF. Sounds a bit painful - I'd need to set up a new super account with another provider, roll to them and then to Stake.

    Sounds like main issue is this 0.7% FX fee. I want to use some US domiciled ETFs. You can only put AUD into the account (I'd put USD straight in and avoid the fee if I could), then you translate to USD and get hit with 70bp, then you use that USD to buy ETFs.
     
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  11. Hockey Monkey

    Hockey Monkey Well-Known Member

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    I’d probably go with icareSMSF @$77 per month and use Interactive Brokers if I wanted to do US trading in an SMSF.
     
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  12. Redwing

    Redwing Well-Known Member

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    Anyone looked at Superhero?

    Super
     
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  13. No_Limits

    No_Limits Well-Known Member

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    I am going with icare, just paid the $880 to set up with corporate trustee. Will report back how it goes...
     
  14. Hockey Monkey

    Hockey Monkey Well-Known Member

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    Terrible option due to the 0.49% admin fee and forced 25% investment in VDBA
     
  15. Hockey Monkey

    Hockey Monkey Well-Known Member

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    Ran into a bit of a road bump with UniSuper late last year. Was transferring 20% of Mrs Hockey Monkey's balance at a time to remain invested at 80% at all times, however UniSuper has a policy of 4 rollovers per 12 months so rejected the final transfer.

    Fortunately common sense prevailed and they made an exception for the 5th and final rollover just before Christmas so we are fully cutover to the SMSF for 2022.

    With 20/20 hindsight, cash might have been a better option the past few months :)

    20% VAS, 80% VTS/VEU at global market cap with the first batch of dividends coming this month. Current balance has sufficient income to cover a full transfer balance cap pension for one member without needing to trigger any capital gains. Useful when you cannot have segregated assets.
     
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  16. William Oor

    William Oor Active Member

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    Great write up, thanks for sharing.
    SMFS is something that I am considering, so tapping into this thread for reference and research.

    Unfortunately I have no other input at this stage.
     
  17. Chris21

    Chris21 Well-Known Member

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    How did you go with iCare + IB setup ? I am considering move , given high FX fees in Stake + i want to invest in property (resinor commercial) through the smsf at later stage.
     
  18. jmy 82

    jmy 82 Member

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    pardon the ignorance, what is a resinor commercial?
     
  19. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Resi OR Commercial ? "n" a typo ?
     
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  20. Chris21

    Chris21 Well-Known Member

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    Yes. Apologies. Was typing late night with a baby in other hand :)