SMSF vrs Member direct or similiar industry fund option

I can't seem to find if this has been discussed elsewhere. Looking for opinions or experience on pros and cons of closing a SMSF and using an industry fund like Aust Super member direct option.

This is firstly for my parents who are in pension phase, I've made coment in other posts regarding their current situation and the astronomical advisor and MER fees they are paying. Spoken to to more FAs and all have been similiar so far.

So now thinking industry fund and member direct approach for dividend focus and term deposits closing the SMSF.

From what I can see Aust super have an admin fee of $395 and a .12% fee on the balance of funds invested. Looks pretty good to me competed to SMSF and obligation required....especially as aging.

Hope that all makes sense.....Sunday evening is home brew and fire bucket evening

 

Don't just focus on fees (most of the industry funds are pretty good on this side of things compared to retail funds). How is the risk profile and returns considering the assets should be mostly in bonds/term deposits and the like?

Not sure if superratings or similar sites do a comparison for pension phase of funds.

Will cashing in the assets in the SMSF trigger a CGT event (admittedly pension phase is CGT-free methinks).

 

Mostly trying to consider closing down a SMSF and achieving a similiar/same choice of portfolio using a "member direct" or "invest direct" option with a super fund, industry or not.

At the moment we are talking $25k advisor and MER fees plus the cost of running the SMSF....$1.4m.

 

Did he advise on the alignment of the planets?

 

No...but he said he had the Deloraine from back to the future and the uranium to run it was expensive.....

Seriously though, I'm really thinking this is the best option, no need for for advisor. If I'm not around to help, worst case they just roll into the funds pre set option.

 

Maybe the adviser goes by the name of Holst. Likely a touch of the mystic when providing advice.

I'll be interested in the result as it's a course of action I am considering. I thought moving a SMSF to an Industry Fund triggers a CGT event - Trust to Trust sort of thing but I need to explore it further.

 

This is all completely new to me, bit they are in pension phase/mode whatever it's called So no CGT payable??

 

Probably

 

@Coconutwheels if your parents are happy to close the SMSF and move to an industry fund perhaps see if they can get an appointment with an industry adviser first? They are currently paying a lot for advice.

 

Oh right Ta.....didnt realise they had their own advisors. That's a great tip.

 

pretty sure they do.

 

Some do but they'll need to be members first.

 

@Coconutwheels I did a quick google search and it seems to me all the industry funds can be helpful. This is a link for Australian Super. I do not have anything to do with them and I am not a member but it is the fund you mentioned in your post Superannuation Tools & Advice | AustralianSuper

 

Contact your preferred industry fund.

Explain the situation, and you will find them remarkably helpful, particularly relating the process of transferring funds to them.

Even if you don’t go ahead, or choose another fund, you will have a better understanding of your options.

 

Given the situation affects parents it would be wise to seek licensed financial advice. The industry fund could assist that for a fee...Not a major cost but an important one. And its the members not you who will obtain the advice. You may be involved in that advice but important its given to them. If they have a "grandfathered pension" a change to a industry fund could trigger a Centrelink issue. A range of matters would be explored.

Typically the CGT costs will be just one of the matters to consider. Losses may outweigh gains etc and may be exempt, partly exempt or even a net loss.

 

Thanks Paul, yes I'll ask them (industry fund) re FA. Less than impressed with three we've had contact with so far. I've made comment in another thread about what's happened leading up to this.

 

Those that currently have a SMSF invested in ETFs LICs etc, would you consider this option? Or why wouldn't you?

It seems, on first glance, you can achieve the same outcome without some of the admin/hassles of SMSF, and in this case a lot cheaper to run.

 

We have SMSF invested in etfs, LICs and shares. We have had this setup for decades. It was the best thing at the time for us. Would we do it now? No, as we have recently gone into pension phase we would join an industry fund. As you say let someone else do the admin and have the hassles of compliance etc.

 

I'm sorry, WHAT??

 

I have SMSF all in stock market, doing various thing options, warrants, individual stocks and ETF
pretty straight forward if you got all the paper work, I file every transactions or data entry every week, takes a 15 minutes a week in the weekend.

if it was a busy week, with lot of trades and options it takes around half an hours, some weeks I got no action then no need to do anything, if I have any action I tackle it and keep on top of it.
If I go on holiday I can tackle up several months and it takes me an hour or two to get on top of it.

give them all to auditor end of the year, every cent in and out is accounted for with paper trail.

No more than 10-15 hours a years for me to keep on top of the paperwork.

Cant give my money to some else to manage, doesn't matter who they are, cant shake off the feeling ticket clipper line up to dipped in once the money is out of your hand.
It is an old habits from seeing too many people got screwed by the finance industry