Each year, the SMSF Association celebrates SMSF Week. Designed to educate and improve the financial literacy of those considering an SMSF for their retirement, throughout the week, we provided educational resources and events to raise awareness and understanding of the SMSF sector amongst the wider Australian community.
Bringing the week to a close was our SMSF + Investor Expo, presented by SMSF Connect, for existing SMSF investors or those thinking about starting an SMSF. Featuring industry experts, educational sessions, and a range of SMSF and investment products and services, the Expo explored a wide variety of topics all from the comfort and privacy of participants’ homes.
Key research: Cost of operating smsfs 2020
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As the cornerstone of this year’s SMSF Week, the SMSF Association retained Rice Warner to update its report prepared for the Australian Securities and Investments Commission (ASIC) in May 2013 ‘Cost of Operating SMSFs‘ in the context of ongoing public debate regarding the appropriate minimum size for a Self Managed Superannuation Fund (SMSF) and ASIC advice regarding fees paid by SMSF Trustees.
The research establishes the size at which a fund becomes viable and then assess implications for funds which are below this threshold.
The analysis for the 2013 report was based on the statutory costs and fee structures for SMSF service providers in comparison to the fee structures of APRA-regulated funds. The analyses were therefore based on potential fees. This analysis has been repeated.
For this report, Rice Warner has also been given access to anonymised expense, cash flow and balance information for approximately 100,000 SMSFs. This has allowed them to consider actual costs incurred.
Cost of Operating SMSFs 2020
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SMSF Week 2020 | Cost of Operating SMSFs 2020 – Your industry takeaways
The SMSF Association has retained Rice Warner to update its report prepared for the Australian Securities and Investments Commission (ASIC) in May 2013 ‘Cost of Operating SMSFs’ in the context
SMSF Week 2020 | Cost of Operating SMSFs infographic
The SMSF Association has retained Rice Warner to update its report prepared for the Australian Securities and Investments Commission (ASIC) in May 2013 ‘Cost of Operating SMSFs’ in the context
SMSF Week 2020 | When is an SMSF right for you?
With over 1.1 million Australians choosing to manage their own Self Managed Super Fund, it has become a popular option for those wanting more control over their retirement savings. An
SMSF Week 2020 | White label document: How much money do you need to start an SMSF?
In the context of ongoing public debate regarding the appropriate minimum size for an SMSF, new research released as part of SMSF Week 2020, provides insights into the true costs
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IN THE NEWS
New research on the costs of self-managed superannuation and the Callaghan report’s spotlight on spiralling fees in the retirement system have caught the eye of younger investors, who are increasingly toying with the prospect of managing their own nest eggs.
The Morrison government’s 10-month retirement income review, chaired by Treasury veteran Mike Callaghan and released on November 20, did not shy away from tackling some of the financial services industry’s most sacred cows.
The SMSF Association (SMSFA) – a lobby group for investors and service providers in the $735 billion SMSF sector – issued its own modelling shortly after, which found the typical fund cost closer to $5000 to run.
A new report commissioned by the peak group for self managed superannuation advisers claims DIY savings schemes can be cheaper than industry and retail funds with balances as little as $100,000.
The report by actuaries Rice Warner challenges warnings about the viability of funds with balances of under $500,000. It claims funds with balances of $100,000 to $150,000 can be viable if DIYers use cheaper service providers or do some administrative work themselves.
SMSF Association Media Release
An SMSF Association survey of nearly 800 SMSF trustees finds individuals are motivated by far more than costs or investment returns when deciding to establish a self-managed super fund.
SMSF Association CEO John Maroney says: “The long-standing debate when comparing an APRA-regulated fund with an SMSF is typically restricted to a simple analysis of costs and returns,
“But the reality, as the SMSF Association’s new ‘Is an SMSF the right answer for you?’ Flyer highlights is not that simple, with an individual’s desire for control over their own personal retirement income goals also playing an important role in the decision-making process.
Self-managed super funds with balances of $200,000 or more are cost competitive with APRA-regulated funds, while at $500,000, SMSFs become the cheapest option, according to new research from Rice Warner.
In its first assessment of the competitiveness of self-directed super funds since 2013, Rice Warner also found that SMSFs with holdings of $250,000 could prove cheaper to run than industry and super funds if trustees undertake some of the administration or choose one of the cheaper admin services.
“In the seven years since the previous report, average costs of APRA regulated super funds have risen whereas SMSF costs have fallen,” Rice Warner executive director Michael Rice said.
A golden era for industry super funds might be coming to an end as a series of key developments in superannuation shine light on improved prospects for Self Managed Super Funds.
The dispute over costs of both commencing and running an SMSF fund should finally be put to rest following a new report from the Rice Warner Group (commissioned by Self Managed Super Funds Association). The report says fees for funds with $200,000 or more are competitive with industry and retail funds, while SMSFs with more than $250,000 are the “cheapest alternative” provided the trustees undertake some of the administration.
SMSF Association Media Release
Retail and self-managed super funds often lose out when listed companies raise capital, and the regulatory framework overseeing equity capital needs to be reformed to remove this anomaly in the capital markets, says SMSF Association CEO John Maroney.
Maroney, who was participating in a virtual forum examining the issue of “Why are SMSF and other retail investors missing out on ASX capital raisings during COVID-19?” as part of the Association’s SMSF Week, says this failing was evident in the aftermath of the Global Financial Crisis (GFC), but legislators and regulators chose not to act.
“Post the GFC, institutional investors were favoured at the expense of retail and SMSF investors, and history has repeated itself when companies looked to quickly raise capital as COVID-19 created economic uncertainty.
SMSF Association Media Release
A research report by the actuarial firm Rice Warner offers clear guidance to existing and potential self-managed super fund (SMSF) members whether this form of superannuation could be cost-effective and the right retirement savings vehicle for them.
SMSF Association CEO John Maroney says the very important decision of choosing the right superannuation vehicle is one that should be guided by evidence and specialist advice, and this Rice Warner report, supported by the SMSF administrator SuperConcepts, certainly provides the data on which to base an informed decision.
“This research updates a report Rice Warner prepared for ASIC in 2013 and used to inform regulatory guidance. Additionally, for the first time, the research is based on actual data culled from about 100,000 SMSFs that provides valuable evidence to guide that advice and should be a key reference point for all interested parties.”
Eight out of 10 Self-Managed Super Fund (SMSF) trustees believe the cost of running their own fund represents good value for money.
An SMSF Association survey found that trustees responsible for their own superannuation are often so engaged with their fund that they are acutely aware that even a modest saving in expenses can prove substantial to the bottom line of a super account over its lifetime.
The “member experience survey” aims to determine the real experience in managing an SMSF and is part of a bigger association project exploring the various qualitative and quantitative reasons where an SMSF might be the right fit.
SMSFs are typically seen as being cost-effective when balances are larger and gain scale due to their ability to have a fixed-fee structure. However, just how cost-effective are they compared with their Australian Prudential Regulation Authority (APRA) regulated cousins?
Step back from two groundbreaking reports on superannuation over the last week and you discover that most ordinary Australians understand what they need in retirement. But the superannuation industry is simply not providing for those needs.
The shortcomings were underlined by the $35 billion exodus of superannuation funds when the government released the clamps.
The exception is self-managed funds where only token amounts were withdrawn. The Rice-Warner report into self-managed funds confirmed what everyone who runs a SMSF already knew — in most instances, self-managed funds are cheaper than public funds once invested amounts exceed $250,000.
About the SMSF Association
The SMSF Association is the leading authoritative voice for the self managed superannuation (SMSF) fund sector, established to improve the quality of advisors, the knowledge of trustees and the credibility and health of a vibrant SMSF community. The Association’s core beliefs embrace every Australian having the right to a good quality of life in retirement and having the right to control their own destiny.