The perceived high costs involved with running your own fund can sometimes be the determinant factor for many people, especially when considering if having an SMSF is right for them. In addition to this, the first question I get asked from prospective clients is “what are your fees?”. It’s a legitimate question and is usually the catalyst for trustees to change administration providers, that and the lack of perceived value they are receiving for that cost.
Being in this industry for quite a while now I have come across many different fee structures. Traditionally the fees to run an SMSF are higher than your industry or retail fund, however the opportunities afforded to you with control and flexibility need to be weighed up in terms of the value they provide you in reaching your retirement goals. In 2014 Rice Warner Actuaries conducted research on the SMSF operating costs across the country and have come up with a scaled view demonstrating the variance in costs.
*In 2014 Rice Warner Actuaries
This table is based on a fund in accumulation mode and doesn’t take in the extra costs firms are charging for pension set ups, actuarial certificates etc.
As we can see there is quite a variance in costs which can sometimes be attributed to different assets held that may be more complex, however in my experience this isn’t always the case. It’s no wonder that the younger demographic (say 30 – 45 year olds) find the above costs a hard pill to swallow, especially as retirement could be some 30 or more years away.
Superfund Partners has taken the approach that where we can leverage off technology and partner with forward-thinking firms, we will. Hence our fee structure is reflective of the efficiencies we have created and passed on to our clients. Our current fee model is as follows:
Low (Standard) – $1,980
Medium (Premium) – $2,640
High (Comprehensive) – $3,300
As you can see in comparison to the industry standard we are well below on all levels with cost.