The cost of an actuarial certification (when required). Investment management fees. The cost of obtaining insurance and relating to winding up an SMSF, including compliance costs and transactions costs related to realising assets. The Productivity Commission Report quantified SMSF establishment costs at ranging between $916 and $2,035. Costs can be more substantial where complex legal or financial advice is required to implement bespoke strategies for the SMSF members. A significant difference in costs of SMSF compared to an APRA-regulated fund relate to the administration fees. SMSF members have the option to effectively manage the administration services of their SMSF such as managing compliance responsibilities, ATO correspondence and paperwork, or they can outsource these services to a professional SMSF administrator. For example, some individuals choose to use a full or part administration service which may add $1,000 to $2,000 in fees (when compared to an APRA-regulated fund) but allows trustees to focus on other aspects of their SMSF or finances such as investment strategies and investments. The below table highlights the most common costs that are not adequately disclosed to SMSF trustees on SMSF establishment. Financial literacy skills If you are struggling with your personal financial affairs, it will not be appropriate to recommend establishment of an SMSF. SMSF trustees have a duty to exercise skill, care and diligence in managing an SMSF, and therefore need to possess a sufficient level of financial literacy to manage the fund and make investment decisions in line with the fund’s investment strategy.
The cost of an actuarial certification (when required). Investment management fees. The cost of obtaining insurance and relating to winding up an SMSF, including compliance costs and transactions costs related to realising assets. The Productivity Commission Report quantified SMSF establishment costs at ranging between $916 and $2,035. Costs can be more substantial where complex legal or financial advice is required to implement bespoke strategies for the SMSF members. A significant difference in costs of SMSF compared to an APRA-regulated fund relate to the administration fees. SMSF members have the option to effectively manage the administration services of their SMSF such as managing compliance responsibilities, ATO correspondence and paperwork, or they can outsource these services to a professional SMSF administrator. For example, some individuals choose to use a full or part administration service which may add $1,000 to $2,000 in fees (when compared to an APRA-regulated fund) but allows trustees to focus on other aspects of their SMSF or finances such as investment strategies and investments. The below table highlights the most common costs that are not adequately disclosed to SMSF trustees on SMSF establishment. Financial literacy skills If you are struggling with your personal financial affairs, it will not be appropriate to recommend establishment of an SMSF. SMSF trustees have a duty to exercise skill, care and diligence in managing an SMSF, and therefore need to possess a sufficient level of financial literacy to manage the fund and make investment decisions in line with the fund’s investment strategy.