Self Managed Super Fund

esuper is one of the last places I would look to be honest. They recommend setting up SMSF s with human trustees. Why ? Because it sound cheaper. Just like their services are marketed as cheap v's typical costs you coudl expect. In return esuper make money in other ways.

Many spruikers in the SMSF space. Esuper is an administration service and NOT an adviser. And ASIC have pinged them for misleading comments used to bait new business. ie Setup a SMSF "free"...ASIC said that was misleading and deceptive.

 

There are lenders that will do 30 year loan terms for residential. There may also be other considerations to your situation that restrict the loan term. Interest rates are quite a bit higher than regular home loans.

 

There are fewer and fewer lenders as mainstream funds have already taken loans and those that remain are far higher risk. Refinance risks and the short dated nature of the loans and some other issues add a high degree of risk and complexity sometimes.


By the time you have a lower LVR (60% ?) and a liquidity buffer and all the costs to setup and structure etc a $200K fund wont buy much value.

 

It doesn't mean this.

The SMSF loans are limited recourse loans which means the mortgagee (bank) can only take the assets of the mortgagor (SMSF custodian trustee), the SMSF assets are safe as they are held by a different legal entity which is the SMSF Trustee.

If a person become bankrupt their interests in superfunds would generally be unavailable to creditors. This includes assets held by the SMSF trustee and the custodian trustee.

This is not because of the mortgages to the banks, but due to trust law and bankruptcy law. Even if there was no mortgages the assets of the superfund were generally be safe.

 

Sounds like the banks and governments are making life rather hard to move over to SMSFs.

Would be nice to have a few million $$$ to buy property in a SMSF without having to deal with the banks. I'm assuming the more wealthy take advantage of them as a way to protect assets?

 

You would have to consider without leverage would property be a good investment?

Yes, super (not just SMSFs) is a good way to protect at least some of your assets.

 

I set up a smsf using esupeefund with a corporate trustee. They are fine for what they do but as you said they are NOT an adviser.

This is the trap of smsfs. I set it up for a specific purpose based on the government rules at the time. 12 months later the government changed the rules and what I wanted to do was no longer possible. I shut it down and rolled the funds into an industry super fund.

Incidentally, esupeefund have an atrocious shut down procedure. Would not recommend. Zero stars.

 

Got to be careful here, they donot "recommend " anything, they donot issue personal advice at all. There is a difference. There are many like esuper and some people are attracted to them. There are over 600k smsfs....how many received advice? and the RC showed how great advice is. Personally, I believe "choice" is important in this wonderful country and the sooner you think about super the better. I doubt spruikers are reccomending esuper.

They are the biggest administrator in the country and I have no issue with what they do, people know its online and thats what they get - its self directed. We used to get one transfer a month from Esuper......Good luck to them and their clients.

Cheers Ivan

 

This post by @Zenith Chaos is in the LIC thread but I'm quoting it here as I think it mainly relates to SMSFs.

The statement which caught my attention was "and I didn't think about it". Triggered a dilemma on attitude.

I find it difficult sometimes to think about making provision for contingencies and I believe it'll get harder as I get older. Tempting to move the whole lot to a provider and let that body do it's thing for me.

Trouble is the SMSF is so useful. See some shares I'd like to grab personally, immediately transfer to my personal account and do the buy (only useful aspect with Macquarie is the transfer is instantaneous to my personal account and cleared). Meets the mandatory account-based pension withdrawal and all that legal stuff.

Possibly there are superannuation providers around which allow that. May have to do some research.

 

SMSFs are typically a bit painful to shut down, as the accounts need to be as up to date as possible after dealing with the bulk of the assets, to work out tax and member balances.

What was so bad about esuperfund?

 

Going into pension phase is hardly a surprise. You know in advance what percentage needs to be withdrawn each year. General advice is to hold 2-3 years of payments in cash (taking dividends into account) to avoid forced asset sales. Simple maths.
Marg