How easy is it to manage my Super?
You may have heard that an SMSF is more difficult to manage than an industry or retail superfund. This can be true but how much more depends on how you set up your SMSF, what assets you buy and who looks after it.
There are three key area’s that impact the time required to manage an SMSF, these are administration, compliance & investment planning.
To start I will say that you can choose to spend very little time by outsourcing all three of these areas. The administration and compliance can be outsourced to an Accountant or specialist SMSF Administrator and the investment strategy decisions to a specialist SMSF adviser/financial or investment adviser. Alternatively you may choose to do some or all of these tasks and yes for each of these tasks that you take on you will be required to dedicate more time to super than you currently are.
Administration includes the paperwork, receiving and collating of bank statements, investment transactions, tax statements, dividend statements, life insurance details and any other paperwork related to your SMSF. The more assets your SMSF has the greater this task becomes.
For those that do this themselves I can appreciate that this can be an onerous task. Once upon a time our local accountants suggested that if we provide a spreadsheet of transactions that we could save costs for our accounting work. Time has well and truly moved on from those traditional and inefficient way of doing things and auditors of SMSF’s do not rely on trustee provided spreadsheets.
I am pleased to say that no longer do you need to do any of this, all that frustration and time spent on administrative duties are a thing of the past. With the advancement of technology, we can do more than that, by integrating bank accounts with platforms and accounting software.
If you use the products and suppliers that we have provided, you do not need to provide a single document to us year in, year out, it just gets completed.
Contributions, pensions, investment returns, bank account transactions and expenses are all provided in a central online location for you to view at any time. This type of “live reporting” can be guaranteed if your share trading, term deposit and cash account platforms can be linked to your administrators accounting software.
Why wait to make an investment decision in your SMSF because you don’t have a complete picture of where you stand.
Compliance of an SMSF is an area that most trustees are not familiar with until establishing an SMSF. There are a number of ongoing responsibilities of an SMSF trustee or Director. These include:
- Preparation of an annual Balance Sheet
- Preparation of an annual Profit & Loss Statement
- Preparation of annual Member Statements
- Preparation of annual Trustee Resolutions & Minutes
- Preparation of an annual Income Tax Return
- Preparation of an annual Audit
- Lodgement of the annual Income Tax Return
These are tasks that almost every SMSF trustee outsources to a qualified and experienced Accountant or specialist SMSF Administrator.
At Supervision SMSF we provide all the necessary support to ensure you fulfil your obligations to meet these requirements.
In my opinion the cost of administration and compliance have become so cheap that it makes complete sense to outsource this task and save you the time and stress of worrying about this. For what most charge $2,500 or more, the cost of a complete administration and compliance service can be as little as $990 per annum with Supervision SMSF.
Investment Planning is the most critical aspect in my opinion.
There are various factors such as do you have interest, time, skills and understanding to do it yourself? If you do that is great not only will you save money but you are fully engaged and in control of the destiny of your SMSF.
If however you answered no to the above then you may consider engaging a qualified and experienced SMSF specialist/financial adviser to help you with the important investment strategy and decisions for your fund. This option should ensure that your portfolio is designed to meet your future needs and with your risk profile taken into consideration. Whilst there is an additional cost for this service you need not invest a lot of time once established and you have the peace of mind knowing a professional is guiding you with the investment strategy.
There is not much doubt that having your own SMSF will require more time than opening a half yearly statement from your current superannuation provider. You do however have options to manage how much time is spent managing an SMSF. The question is how much time are you prepared to commit to enjoy the many benefits, flexibility and peace of mind knowing you are in greater control of your destiny?