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4. How much does it cost to set up a SMSF?
It costs only $500 (plus GST) for McMasters’ to set up a SMSF. This includes the trust deed, ATO registration, tax file number application, assistance with bank accounts and assorted other minor tasks connected to setting the SMSF up as a McMasters’ SMSF client.
The total fee of $500 is fixed no matter what the size of the fund and includes GST.
We believe this is the lowest fee offered in Australia. The fee is low because the work is done in Vietnam by McMasters’ branch office using advanced technology and all documents are delivered to you over the internet. The ATO registrations are also completed in Vietnam over the internet.
McMasters’ accounting and audit costs are set out at www.mcmasterssuper.com.au and you can access them directly here: McMasters' SMSF fee schedule. As you can see, costs can be as low as $600 a year and are generally much lower if you use Banklink. Banklink is free software designed to:
- save you time, we receive your SMSF’s financial data directly from your bank so almost all data entry is eliminated;
- save you stress, we set up simple account descriptions so you do not have to worry about complex accounting codes; and
- save you hassle because we provide you with simple checklists to complete to streamline and simplify the end of year accounting and audit processes.
McMasters’ accounting and audit costs include the he annual accounts, the audit, the tax return and the APRA/ATO return. McMasters’ is independent, which means there are no commissions or hidden fees paid to us. The most important variable is the number of transactions and the second most important variable is the completeness and correctness of the records and source documents provided to us. Costs rise where records are not kept properly, if the SMSF is unusually big, if there is an unusually large number of transactions, including rollovers, sales or purchases, or an unexpected complexity arises or if we are asked to do extra work outside our normal engagement.
No work is charged without the client’s prior written consent, usually obtained by e-mail on the delivery of a quote for the work before the work starts.
This is a significant saving and cannot be ignored by anyone interested in investing minimizing costs is critical to your portfolio’s success.
And McMasters’ does not receive commissions from any sources, and in fact our unique Commission Rebate Scheme (McMasters' Commission Rebate Scheme) means you may end up receiving rebated commissions greater than your accounting fees, depending on your SMSF’s investment profile.
Fees for consulting services
Fees for services other than accounting and audit services, ie consulting services, are charged on a time-spent basis when the work is done.Insurance
Comparison with managed funds
McMasters’ fees are much less than managed fund fees. Managed fund entry fees are normally between 3% and 5% and annual costs are usually 1.5% or more of the amount invested. This means if you invest $400,000 in a managed retail super fund you pay between $12,000 and $16,000 on day one and another $6,000 each year thereafter. And this is only the fees you are told about. There are a host of other costs that are charged by the managers and others that the investors never know about. Life office fees are usually even higher. It is not unusual for life office fees to be so high the client gets back less than the client has paid in even after ten years.
A 2009 Federal Government Study concluded that SMSFs have lower costs and better investment performance than both managed funds and index funds.
Reduce your SMSF’s compliance costs with Praemium Portfolio Service
The “Praemium” Portfolio Service is an Internet based/on-line portfolio service that allows us to download your SMSF’s investment portfolio records directly into our accounting software. It then produces all required reports and other documents with significantly less accounting time. This means you pay lower SMSF accounting fees.
Praemium saves clients money.Praemium’s key features include:
- transactions for listed securities are updated directly from your executing broker and corporate actions are added automatically, including dividend distributions;
- direct links to your SMSF’s bank account to reconcile trading activity;
- managed fund data is updated automatically including distributions and revaluations; and
- SMSF trustees have online access to portfolio valuation reports, realized CGT reports unrealized CGT reports, income reports, performance reports and transaction reports.
How does Praemium help you?
- Praemium reduces your SMSF administrative burden allowing you to spend less time on paperwork and more time doing the things you enjoy.
- Praemium helps you keep on top of your SMSF investments by accurately monitoring portfolio and stock performance.
- At the end of the financial year our team will already have processed 90% of your SMSF’s transactions reducing your accounting costs and helping you meet your SMSF’s statutory deadlines.
- Praemium costs around $220 a year. We pay this cost for you and then invoice it back to you as appropriate.
- Praemium is excellent software that is normally sold to SMSF clients under the service provider’s own banner, and presented as their own portfolio administration service. Some providers charge thousands of dollars a year for what is in fact an off the shelf software package that costs just $220 a year.
Banklink
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