Despite the great year that super funds had in 2013 – the best since 2007 – many investors are still wary of investing in commercial super funds. The fund managers are paid regardless of performance: win, lose, or draw, their ‘expertise’ will cost you.
Unsurprisingly, many super fund investors are turning to SMSFs. These allow you to decide what to invest in, and are perfect for property investment, too. In fact, SMSFs are now the largest sector of super funds in Australia.
For many SMSF investors, though, a drawback is the amount of administration that is required to meet legal requirements and help produce the best returns.
The importance of proper administration of SMSF funds
If you are the trustee of the SMSF, it’s important that all management of the fund is kept separate from your own affairs. You have to be able to prove that there is no crossover, and that every action is taken in the best interests of the SMSF members.
If the fund isn’t administered properly, the tax concessions that normally apply could be affected. You could also face financial penalties.
The administration of the SMSF includes the following:
- Setting up the fund and general SMSF advice
- Working out the structure of the fund
- Creating the trust deed
- Recording the members’ tax files
- Bank accounts
- Audit of investments and financials
- Accounts and tax returns
It’s clear that when choosing the administrator of your SMSF, you’ll need to be certain of the ability of who you select.
The Cooper review and SMSFs
In 2010, the Cooper Review made several observations and recommendations with regard to SMSFs. One of these was that SMSF trustees are often dependent upon service providers with inadequate SMSF knowledge and administrative capability.
To address these shortfalls, many SMSF administrators have either invested in technology or outsourced to specialists. There is certainly a case for both, and outsourcing means access to specialist expertise in all facets of SMSF administration. However, for cost purposes much of this outsourcing has gone abroad to India, Malaysia, Vietnam, and even Sri Lanka.
How Super Finance Professional Networks Differ
Super Finance specialises in SMSF property investment, and uses a network of the very best, fully qualified financial advisors here in Australia. Each has expertise in every stage of SMSF administration, from initial set-up to arranging finance and all related administrative matters.
Many companies apply a purely legal or accounting point of view. Super Finance assists you with a completely holistic approach, encompassing the investment, legal, and accounting requirements of SMSF administrators. It’s this approach, and related expertise and experience, that has clients like Garry Karrasch of Carefree SF Nominees Pty Ltd saying that Super Finance is the organisation that has ‘the knowledge that we needed to move ahead’… ‘after two years and lots of money lost for trying to find the right person.’
