How much does an SMSF cost?

2 min read

One aspect of determining whether a Self Managed Super Fund is right for you is to consider the costs of running your own SMSF and comparing it to the costs you would incur in a large super fund.

How much does an SMSF cost?

It is important to consider the costs associated with an SMSF and to compare those costs with what you would incur by keeping your benefits in a large super fund. The difference in costs can be considerable because of the way they are charged. The various costs related to SMSFs are more likely to be fixed and therefore, the overall cost is generally less affected by changes in the level of benefits within the fund. On the other hand, the fees charged in large super funds are generally percentage based and as such, increase in-line with the level of benefits.

Where the combined benefits within an SMSF are less than $200,000, the SMSF is unlikely to be cost competitive compared to a large super fund.

Examples of SMSF costs

Cost Type 

Details

Costs associated
with setting up
an SMSF

Unavoidable

Costs for a trust deed.

Optional

Costs for establishing a corporate trustee, including the ASIC fee for establishing a corporate entity.

Ongoing costs
associated with
operating an
SMSF

Unavoidable

The annual SMSF supervisory levy (collected by the ATO), the annual independent audit fee, costs to produce an annual financial statement and tax return, and (when required) the fee for annual actuarial certification.

Optional

Costs for amending the trust deed of the SMSF, professional investment advice fees, accounting and book-keeping fees, and investment management fees.

Costs associated
with winding up
an SMSF

Costs will include both compliance costs and costs related to realising assets. The nature of some of these costs will depend on the assets the SMSF invests in, but might include brokerage or agent fees.

Further, there is a cost associated with the time you spend on running your own fund which will depend on how much you do yourself and how much you outsource to a professional.

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As a trustee for a Self Managed Super Fund you need to consider who will be responsible for the administration of the fund if he person currently looking after it is not around.
Self Managed Super Funds can offer Tustees more control over the taxation of their superannuation however like all aspects of SMSFs there are rules that apply.
As the Trustee or Director of the corporate trustee of your SMSF it is essential that you understand the stringent rules that apply. Here we look at some of the key rules.

The information in this document has been prepared by Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714. The information is general in nature and does not take into account your personal needs, objectives or circumstances and therefore, before acting on this information, you should consider whether it is appropriate for you.

BT Portfolio Services Ltd ABN 73 095 055 208 AFSL 233715 (BTPS) operates BT Panorama Investments (the investor directed portfolio service operated by BTPS). BT Funds Management Limited ABN 63 002 916 458 AFSL 233724 (BTFM) is the responsible entity and issuer of interests in BT Cash and Westpac Financial Services Ltd ABN 20 000 241 127 AFSL 233716 is the responsible entity and issuer of interests in BT Managed Portfolios. An Investor Guide is available for BT Panorama Investments and a PDS is available for BT Cash and BT Managed Portfolios (the Panorama products). These disclosure documents can be obtained from BTPS by visiting www.bt.com.au/smsf or calling 1300 881 716. A person should obtain and consider the disclosure documents before deciding whether to acquire, continue to hold or dispose of interests in the Panorama products.

In addition, BTPS is the provider of the Panorama SMSF Establishment Service and the Panorama SMSF Administration Service. The Guide and Terms and Conditions for these services are available by visiting www.bt.com.au/smsf or calling 1300 881 716

BTPS, BTFM and WFSL are subsidiaries of Westpac Banking Corporation ABN 33 007 457 141 (Westpac). Apart from any interest investors may have in Westpac term deposits or securities acquired through Panorama, an investment in or acquired through Panorama is not an investment in a bank or a bank deposit. Westpac and its related entities do not guarantee an investment in or acquired through Panorama Investments.

© Westpac Banking Corporation 2016