SMSF annual adviser fee, 300K portfolio in cash at the moment

Discussion in 'Superannuation, SMSF & Personal Insurance' started by kaibo, 30th Apr, 2020.

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  1. kaibo

    kaibo Well-Known Member

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    They have suggested 0.8-0.9% but I don't really trust their advice and was just going to do my own thing but still want it overseen (admin and some suggestions occassionally)

    I think they want me to setup a BT Panorama account based thing which charges
    $540 plus 0.15%, 0.9% accountant adviser fee annually, Auditing done by this accountant is around $2100 so total fees not including funds and trading fee is around 1.8% (before indirect costs) seems steep

    I am also considering to go back to Industry super around 0.3% fees..

    What I end up doing if I stick with Accountant and SMSF is ito put half in 6 ASX shares and the other half in 3 funds

    Don't want to sound arrogant but have had over 500K outside of shares in equities before so I sleep OK. What do you think is the adviser fee could be revised to? I know they got to clip the ticket but seems a bit high

    One of the reasons I am in SMSF was thinking about residential property a couple of years ago but then Royal commission came along but will think about it later again but more for commercial property (6 years time?)

    Any suggestions would be appreciated
     
  2. JohnPropChat

    JohnPropChat Well-Known Member

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    Step back. What are your expectations from an "adviser", the fees are certainly high but all depends on what they are bringing to the table.

    More questions without being harsh:
    1. Are they promising better than market returns?
    2. What makes you think your 6 shares will perform better than market?
    3. When you say 3 funds, are you talking about ETF/index funds?
    3. What did royal commission do to resi property in SMSF? I've acquired a resi property in SMSF just before the elections as it was on the chopping block. So far has been performing well with good yield and great CG prospects. Not advice, just saying what I've done.
     
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  3. Coconutwheels

    Coconutwheels Well-Known Member

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    If you had no interest in holding property in super, for me the decision would be easy, industry super fund or similar, job done.

    SMSF accounting $2100, $4500 in advisor and platform fee, so $6,600p.a chipping away at your $300k every year.

    That's before we see what investments you're advised, I'm a bit jaded from recent experiences, but will most likely spread you across 10-20 funds and have an average MER close to 1%. So add another $3,000 to to above fees........

    Of course there may be other value the advisor brings to the table, through advice on various aspects.
     
  4. geoffw

    geoffw Moderator Staff Member

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    I took advisor advice in the sort of investments, then went alone following his broad advice (but not specifics). I went ETFs instead of managed funds as recommended; I opted not to go with a platform. My understanding was that a platform would have allowed me to ditch my SMSF but I had specific reasons for keeping it.

    Having done this, I was able to move quickly when the panic hit, and sold out before things went too bad. I'm at a stage in life where capital preservation is important and time to mend isn't on my side.

    This was just me doing what I was comfortable with.
     
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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Just pay an hourly rate. You should never pay an annual fee that is a percentage I think.
     
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  6. kaibo

    kaibo Well-Known Member

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    1. They never promise anything and just cherry pick numbers, there recommendation is just a standard 10 funds that I could pick myself (They copy and paste a list). You talk to the accounting firm practice planner they don't know anything about shares.(Just because they have license it means **** all). I can get more talking to my friends. They just see you as an income stream in changing your insurance cover so they can pick up the up front commission again (trailing not enough) with minimal savings for me. Outside of basic accounting advice don;t really need them but they keep trying to make money off you because they know you are work $X (there must be a KPI for $ they should make for clients worth $Y)
    2. It's my money I talk to people do my research, already hold them out of super but if I hld them in Super then can sell those and do things with that money that Super can not do
    3. Microcap funds, I want exposure there and it's an option that can happen on super platforms so why not. Wouldn't bother with index as might as well be in Industry super fund
    4. Royal Commission time not necessarily to do with royal commission but I never buy property out of Melbourne (east/south east) and am not bullish on anything around here sub 700K especially now. Even buying on main rd and getting zoning changes the upside is below 30%
     
  7. kaibo

    kaibo Well-Known Member

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    In reality they like it because it's fee for no service, They are mainly just trying to sell product (insurance, adviser fees,off the plan units). I think the royal commission should look in to these as some of the stuff they do is worst than what the banks do but because they are smaller firms they fly under the radar more. They don;t make enough from accounting services so vertical integrate to have brokers, lawyers and planners in house (quality of these are questionable and rapid churn but directors still there so they leverage off that). One stop shop works when the quality is maintained throughout all the different people

    I guess thats the price of convenience. Obviously they don't want to lose me to Industry super as at least my super money will be out of their eco-system and fees
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Sounds like you are not happy there - won't haven't you left them?
     
  9. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    The OP is blending a range of issues. Audit. Accounting.Financial advice. Platform. Trustee fees.

    For 300k makes no sense if their costs reflect as 6% do you think they will outperform professional industry funds by that without risk,?
     
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  10. kaibo

    kaibo Well-Known Member

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    can't be bothered changing over as explaining to a new accountant about things from previous years etc. I run a SME and have a few investments. If I was an employee would have left ages ago.

    Also accounting firm is meant to be a specialist in my field so do get a little advice there (benchmarking and connections etc) and am comfortable with accountant I deal with. Also speaking to friends in similar situations the other accountanting firms run a similar model so grass may not be greener anyway.

    Thank you for all those who have replied its been a great help
     
  11. Redwood

    Redwood Well-Known Member Business Member

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    In the current environment you will be able to immediately make a decision on a financial advisor, if they are flogging off the plan units.

    Cheers Ivan
     
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  12. Superman__

    Superman__ Well-Known Member

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    Agree. Surprising how many advisers are still % based (although might say it's 'fee for service').
     
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  13. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Depends what they do and what the % is. A percentage is a proportional measure. Every single industry fund and managed fund trustee does this.

    I have seen advisers with fixed fees maintain a fee when performance falls. A % fee falls when value falls