SMSF - advantages / disadvantages

I'm looking at maybe using a firm to help transition my super into a SMSF.

Has anyone used someone like a Henderson Maxwell to do this?

Can the forum explain in plain English the advantages/disadvantages of such a move?

I'm 54 , wife is 48 so want to set up towards retirement

Your help will be greatly appreciated

Cheers

 

You can use the website www.superguide.com.au as a good resource for information.

The question of “is a smsf right for me” can only be answered by an afsl licensee - beware of conflicts which are rampant in the financial product advisor space.

If you have already made a decision and you just want executional work done then that can be done by lots of people.

 

Thanks Boys for the replies.
I haven't done anything as yet Ross - just trying to get a gist of what it involves

Cheers

 

Do yourself a favour and read up first (its free) - ATO also has some good independent guides on smsfs.
Alos read in the link about asic guidance on financial advice

Thinking about self-managed super

 

@RS Gumby

Mr Henderson has been in the news today...

Hopefully you too did not give up a defined benefit pension and take a $500,000 haircut...

ouch

 

The pros and cons of a SMSF

 

A link like that doesnt address the members needs and the objective benefits and risks based on personal issues.

eg life insurance impacts, costs and many other issues not mentioned in the advertorial

The Royal Commission matters Marty refers to in summary (The Guardian)

 

Thanks for the heads up guys
Geez who can you trust?....

 

Yeah...Dont go to AMP. Go to your trusted bank. Hell no. Go to an independent adviser. Oh hell. Put it in your mattress....

 

I do like Sam Henderson of Henderson Maxwell he is on Foxtel money show.

Was he a surfer when he was younger .?

He is quite goodlooking for his age, i think he lives on the Northern beaches?

 

During his testimony in the royal banking commision it was brought to his attention that his financial services guide states that he has a masters in commerce. He does not - he claimed it was a typographic error.
In his book “the one page finacial plan” it states “Sam has a Master of Commerce”.
Multiple typographic errors or deceit?
It may seem minor but if you can’t trust the simple stuff what about the rest?

I went to see Sam a number of years ago and an SOA was prepared.
The plan recommended his own funds and had outrageous fees an no real comparison with other possibilties. The SOA was riddled with errors, including figures that didn’t add up.
It was clear Sam had little to do with the production of the SOA and he hadn’t even checked it.
I tried having him correct the plan but gave up in the end after multiple versions and walked away - phew! In the light of Sam being in the news I took a look at the SOA and am way in front of where he predicted I would be. If I had followed his plan I firmly believe I would be behind his projections, mainly due to the fees.

He is all about sales, hence it’s important he presents well - a snake oil salesman.

 

He might be relocating soon .

 

There is one negative point there which is "increases admin work". What do we really needed to do? It would be a tax return and signing few documents every year right?

 

One benefit often overlooked is estate planning. SMSF can allow for absolute control of the fun and the benefits upon death or incapacity

 

Typo or Freudian

 

Its fun dying isn't it?

 

I contemplated moving to a SMSF some time ago and decided to go the ‘direct investment’ route through my industry fund instead. This allows me to directly purchase shares/ETFs within my fund, and avoid the administrative burden associated with a SMSF. Weighing on my mind was not so much just the upfront work, but also the need to regularly organise life and disability insurance, etc that is provided as a matter of course in an industry fund. I have not ruled out eventually going to a SMSF, but the direct investment route seems to be working ok for me at the moment. Industry funds are starting to offer this option more given the competion from SMSFs. A question for the PC community; If a person’s goal is to just invest in a range of very vanilla ETFs, is there much additional benefit in moving to a SMSF?

 

Wrong. That indicates non-compliance. The tax return include a regulatory return. The return can only be lodged after the annual financial and member report is audited. And prepared in a manner that complies with trust obligations and super laws. Just some of the other compliance issues:
- Electronic Service Address
- Member components
- Investment strategy
- Revaluation of assets
- Member segregation if it is used
- Apportioning and allocation of income esp where non-linear balances and income issues occur

Who would prepare the documents each year ? What are they ?

 

Possibly not. I say that as many super funds limit their APL (approved product list) to the basic ETFs. Leveraged and other exotic ETFs and currency risk ETFs are commonly unavailable for most funds and super platforms. An example of this is provided below. Its the Sun Super Direct Shares APL. Its quite short you will notice. No GEAR, MOAT etc. And dont bother asking. And note the APL often will restrict the %.

However, A SMSF can basically invest in anything it wishes directly providing it has a investmnet strategy approved by the trustee / members that agrees to buy it. We have a number of SMSF clients who choose a SMSF specifically to access a broader range of direct investments.

SMSFs that have direct investments can also often exit a market or adjust strategy within minutes unlike even a fund that offers direct products. Many have weekly change policies etc that trap investors and limit strategy and some has=ve costly brokerage and other limits explained in the PDS. eg Sun Super limits its cash choices to a few low rate choices v's a SMSF.

And many super funds dont offer specific investments - Just a class or strategy. eg "Growth".

 

I thought the accounting company we deal with will take care of this within their annual fee which is around 2K ish.