What Are the Costs Associated With a SMSF?

While saving for your retirement is a good plan, it can be costly. Of all the different options available, self managed super fund offer better transparency and lower costs because you and the other trustees of the fund do all the administrative duties yourselves.

A self managed super fund may not be for everyone and, just like anything that costs money and comes with a risk, you must be sure you know what to expect before committing. There is, however, more flexibility too when it comes to a self managed super fund which allows you to manage and strategise your investments to suit your personal needs and those of the other trust members.

Understanding what the costs associated with a self managed super fund are is key to reaping the potential rewards as well as being vitally important. There are four separate key areas associated with the costs of a self managed super fund. These are the initial advice costs, the establishment costs, the ongoing costs and the ongoing advice costs.

The Initial Advice Costs of a Self Managed Super Fund

Initial advice costs of your self managed super fund vary depending on the specific level of advice you need. Whether you need assistance with the basic setting up of your self managed super fund or whether you need help with a sound investment strategy will determine what you will pay for specialist advice. Always get a quote first.

The Establishment Costs of a Self Managed Super Fund

Establishment costs of your self managed super fund are mainly determined by which trustee structure you choose. There are different fees for individual trustees and corporate trustees. Establishment costs also include fees required for drawing up the trust deed, registering the self managed super fund with the ATO, and applying for the TFN and ABN.

The Ongoing Costs of a Self Managed Super Fund

The ongoing costs of your self managed super fund include a variety of administrative costs that depend on the size and complexity of the trust. It is also dependent on whether the trust is accumulative or pension based. Recurring costs that can be expected are the account keeping costs and auditing costs. Seeking outside help from an administrative or self managed super fund specialist is an additional cost, and there can also be other costs involved, such as investment properties.

The Ongoing Advice Costs of a Self Managed Super Fund

Ongoing advice costs of your self managed super fund are not compulsory and can be controlled by you. These costs cover advice you receive from a professional. The advice can be related to a specific aspect or it can be ongoing and in-depth over a long-term period. Advisors can assist with all areas of your self managed super fund, but it is up to you to decide where you need advice and find the most affordable advisor. It is best to shop around for the best advisor.