09 Dec 2014
accountants news

SMSF Myths Busted

Over 900,000 Australians run their own SMSF. But the news media is in a frenzy at the moment about SMSF’s and property investments.

We understand that SMSF’s don’t suit everyone, so it’s important you get the right information to decide for yourself.

To assist you to make a correctly informed choice, here are the FACTS:

Why do people set up their own SMSF?

  • To be able to make their own decisions about where their super is invested.
  • To invest in your own chosen property (business premises or residential).

Is it expensive to set up a SMSF?

No, it isn’t. You need a SMSF Trust Deed (the document that contains all of the rules for running your super fund) and we recommend you incorporate a Company to be the Trustee (the decision maker) for the SMSF. Our price for this is $3,000 plus GST, which includes preparation of all required documents, establishment of a new Cash Management Account, and everything legally required for a SMSF. For example, if you have $200,000 in super, then the setup costs are 1.5% of your super balance – very low for setting up your financial future!

What are the ongoing running costs of a SMSF?

The ongoing costs start from as little as $200 + GST per month for the administration of your SMSF (includes tax returns, annual financial statements, minutes of Trustee’s meetings) plus $500 + GST for the annual audit of your SMSF.

How does a SMSF compare with standard super?

For a side by side comparison of approximate costs of a SMSF to that of an off-the-shelf super fund recommended by, say your bank, turn over the page.

How much super do I need to set up a SMSF?

Some new media stories suggest you need at least $200,000 (or even higher) to make it cost effective to have a SMSF. We disagree. A SMSF is your family wealth creation vehicle. Even if you have as little as $100,000 in super right now, it may make sense to establish a SMSF and then set up life insurance (owned by the SMSF) on SMSF members while they are still fit and healthy. Also, in many situations using a SMSF can give you much better estate planning options.

As an example, if you have $100,000 in super and purchase a property (using a borrowing arrangement) valued at $400,000, then you would have a SMSF with $400,000 in gross assets. Assuming a capital growth rate of 5%, you would generally expect the larger amount of $400,000 growing would provide a better outcome than the smaller amount of $100,000 growing. This is why many people consider a borrowing arrangement for a SMSF.

What investments can I make in a SMSF?

Typical investments include shares, cash, term deposits, and property. There are specific rules about what you can invest in, so it’s important you seek our advice before you make any decisions.

FREE SMSF Consultation – Book NOW!

To assist you to make an informed decision, contact us TODAY on (03) 8663 5100 for a FREE 30 minute consultation. We can clearly explain, using our exclusive SMSF Comparison Report, the benefits of a SMSF and whether or not a SMSF is the right thing for you.

Don’t delay. The sooner you get started with the right advice, the sooner you will grow your assets to have a better financial future!

Email us today [email protected]

A comparison of an SMSF to a standard, off-the-shelf superannuation fund (ie, one available through CBA, BT, etc through most advisers or the banks directly) would be:

Self Managed Super Fund

Retail Super Fund

Super Fund size:



SoA Fee:

$1,200 – 2,000

$1,200 – 2,000

Establishment Fee:


1-2% = $1,500 – 3,000

Ongoing Admin:

$2,400 pa

$1,050 pa

MER (managed funds):

Nil (if shares or property)

1.8% pa = $1,500

Annual Adviser Service Fee:

Nil (if property)

1% pa = $1,500

Annual Audit Fee:



Total (in year 1):

$7,100 – 7,900

$7,950 – 10,250

Total (in year 2):




Note: The fees are similar for setup and the first year, though the longer-term is where an SMSF may be more cost-effective than standard retail funds.