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SMSF vs Retail Funds

Superannuation Warehouse is an accounting firm and we do not provide any financial advice (we are not financial planners).

Trustees need to be mindful of their own financial situation and objectives when setting up an SMSF. Once a Fund is set up, all financial decision making are managed by the Trustees of the Fund.

When comparing with a Retail Fund

There is no legal requirement for a minimum balance in superannuation to establish an SMSF.

In terms of costs, SMSF fees are transparent as all administration fees are paid by the SMSF bank account, which are in turn managed by Trustees. However, for Retail Funds, there are many charges hidden in the back of a Product Disclosure Statement that may include but not restricted to:

Administration Fees

General administration fees to cover the cost of operating the fund and keeping your super account.

Investment Fees

Fees for managing your investment which can vary for different investment options.

Indirect Costs

Costs paid by your super fund to external providers that affects the value of your investment. Typically these are costs paid to investment managers.

Advice Fees

Fees for personal advice provided about your super and other investments. Your adviser may also receive fees and commissions for certain investments they recommend to you and these are not included in product disclosure statements (PDS) by the super fund.

Switching Fees

Fees for changing your investment option within the fund.

Buy/Sell Spread

This is a fee that you may pay every time you make a transaction, including making a contribution, switch and withdrawal. The fee covers some or all of the cost of transactions entered by the fund.

Insurance Premiums

The cost of insurance provided through your super fund. Many super funds have a set default insurance option. You can usually choose to lower or increase your level of cover based on your needs.

Exit Fees

A fee for leaving the fund.

Activity Based Fees

These fees are only charged if your super fund provides you with a particular service, for example, a family law split fee, where you’re charged to split your super following a separation and family law court order.

Many of the fees noted above can be avoided in an SMSF. SMSFs may therefore be ran on a more cost efficient basis than a Retail Fund. At Superannuation Warehouse, our fees are fixed irrespective of the size of the Fund. This allows for two major advantages for our clients:

  • If you are on our $100 per month package, we do not charge extra fees for additional investments that the SMSF undertake.
  • We do not charge extra fees if more Members or Trustees join the Fund

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