More and more Australians are switching from retail super funds to SMSFs because they offer better control and flexibility. An SMSF administration firm is a company that specialises in providing SMSF trustees with set-up and management services for their fund.
Running an SMSF can be problematic and time consuming, but if you need more support, an SMSF specialist can make your life a whole lot easier.
SMSF administration firms provide the following services to SMSF trustees:
- SMSF establishment services.
For an SMSF to have access to concessional tax treatment, it must be set up correctly. A regulation election is submitted to the ATO, along with the fund’s ABN and TFN applications. A specialist SMSF administration firm will assist in ensuring that your fund is set up correctly and is compliant.
- Ongoing compliance management
Your specialist SMSF adviser assists you with managing the day-to-day compliance obligations of your SMSF under the law. It is important that the fund is compliant with the ATO rules and regulations at all times. SMSF administration firms typically provide this service to their clients.
- Taxation services
There are several annual taxation obligations of SMSFs. This includes the preparation of annual financial statements and tax returns. The fund must also be audited by a separate independent auditor annually. Your SMSF administration firm should not be the auditor of your fund. The ATO regulations require that the auditor is separate and independent. However, your SMSF administrator will typically have an arrangement with an auditor and coordinate this annual audit process on your behalf as required.
- Audit services
The role of the auditor is to conduct an independent review of the fund. The review consists of an audit of the amounts disclosed on the fund’s financial statements. It also includes a compliance audit of the fund in accordance with the super law. The auditor is required to sign an independent audit report annually to confirm that the fund is ATO-compliant. If your fund is in breach, the auditor is required to bring the infringements to your attention and report them to the ATO for rectification.
- Financial services
Many SMSF administration firms are also licenced to provide financial advice or have relationships with advisers who can provide these services to you.
Financial services may include investment advice including which shares/managed funds to buy and sell. It may also include which investment platforms to use, and advice on which insurance cover is appropriate for your needs.
In choosing an appropriate SMSF administrator, you should consider the following:
- The level of involvement you need.
Many administration firms these days have online access only. They don’t have a dedicated call centre, and you can only contact them by email.
- The time you have to invest in managing your fund.
If you have the time and are confident enough, you can make the investment and insurance decisions yourself. However, if you do, you may not achieve the returns you expect. In addition, you may end up with insurance that is inappropriate for your circumstances.
- The cost of the work they will perform for you.
According to the ATO, the average cost of the administration services associated with SMSFs is around 2.84% of fund assets. This information comes from SMSF annual return data released by the ATO.
With all of the compliance obligations trustees have these days, it is important to not just consider costs alone when making your decision. You should seek the services of an appropriately qualified firm that suits your needs.
Most firms offer a fixed-fee SMSF package that includes the administration, tax return preparation and annual audit of your SMSF. With fees starting from as low as $990 including GST, we can assist you every step of the way. Our SMSF packages include personalised service, access to our SMSF specialist adviser and compliance management. We provide quotes for our services upon request, and a free one-hour initial consultation to assist you in making your financial decisions.