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This is the second part of the SMSF “story”. The first part can be found here: The Benefits of Self Managed Super Funds
For many people, a substantial amount of capital is invested in superannuation. In today’s marketplace it makes good sense to maintain a degree of control, and self managed super funds (SMSF) are the obvious and increasingly popular choice. However, most of us are basically passive investors who prefer to have expert SMSF administrators look after the day-to-day maintenance of our account. Passive intelligence can be a good thing, especially if your SMSF is in the right hands, but how do you find the best self managed super fund?
Many investors visit their local bank branch. After all, the bank is in the money business and would appear to be the obvious expert. However, most banks will simply refer you to one of their own in-house financial planners as they want to retain control over your savings. A better option is to search out the best privately owned SMSF specialist.
Commitment to service at the right price
Cost and service are the two major considerations when searching for the best self managed super fund. Companies that provides a range of associated services for less than 1 per cent of the fund’s value per year are worth investigating. A high level of service will ensure your fund is compliant, providing peace of mind in knowing you will not be paying hefty tax penalties or unexpected fees and charges.
As the market continues to segment, some providers search out avenues to compete on price, while others are more inclined to deliver personalised administration, trustee education, and technical advice. Progressive providers such as Clime SMSF harmonise all elements, resulting in a cost effective self managed super fund tailored to individual client requirements. They take your fund’s balance into consideration, along with your investment preferences, while providing comprehensive technical guidance and full support.
Dramatic self managed super funds growth
One third of Australian’s investment in super funds now sits in self managed super, with greater investment flexibility cited as a driving force in the change. Nevertheless, a sensible investment strategy, workable structure, expert guidance and appropriate support are essential components for a successful outcome. Good intentions can soon become compromised under the weight of paperwork compliance issues; hence the need for an expert financial administrator.
The size of the self managed super sector has resulted in a general improvement of standards amongst administrators, with SMSF accreditation increasingly expected from employers. Trustees are becoming savvy and expect high levels of technical support. A good starting point for converts to SMSF is to employ the services of a company that has at least five years service provision of self managed funds to a substantial number of clients. A qualified SMSF manager will know when, where and how to invest your money for greatest returns, and should be willing to provide documented proof of fund performance.
Beware of add-ons and extras. It’s important to understand what is included as part of your annual administration fee. Hidden costs can quickly add up, especially when full fee disclosure is avoided by some companies. For example, a fund set-up will vary from $0 to more than $1,000, and is further increased if you elect to set up a company as a trustee. Transferring existing funds can also incur a fee, as can pension establishment set-up.
Although your primary motivation may be setting up a workable super fund, it can pay dividends to have your super administration service overseen by a broad-ranged financial services business. This will provide you with in-house financial, legal, and investment planning expertise. Trustee education should also be taken into consideration. A provider that offers face-to-face guidance will keep you up to date regarding your super fund performance as part of their ongoing service commitment. After all, your self managed super fund should be designed to work for you, free up your time, and provide greater returns on your investment.