In recent years, fees for SMSF accounting services have consolidated as streamlining and data efficiency have come into play. Bank account and investment data feeds that plug straight into the accounting software have significantly reduced the manual work required to complete the annual SMSF audit and financial accounts. Some accountants, either by choice or inability to use streamlined processes, still manually input data which comes at a higher cost.
Exactly how much a self-managed super fund cost to run has been a widely contested issue in recent years between SMSF service providers and financial regulators. In 2017-18, the ATO released data showing that the average annual cost to run an SMSF was in the vicinity of $15,000 per annum, which SMSF service providers have commonly disputed. They believe the data is skewed higher by funds that hold more complex investments and real estate property assets. The costs of running an SMSF largely depend on what investments the fund has, and the information below will show the standard fees that SMSF trustees might incur when running their SMSF.
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Initial setup costs
The initial setup costs are the fees for establishing an SMSF and will include fees for the ATO forms, the trust deed, investment strategy and financial product advice received. Depending on the SMSF structure chosen, there may be some additional fees for setting up a company structure (corporate trustee structure). Chartered accountants or SMSF accountants would usually be a good place to start when looking to begin the SMSF setup process.
Ongoing admin and compliance costs
There are many ongoing administration and compliance costs that SMSFs have to pay to ensure they remain compliant. The annual tax returns, financial statement and the cost to get the fund audited by an ATO registered auditor. There is also the cost of the ATO supervisory levy, which is $259 regardless of the size or complexity of the superannuation fund.
If you decide to use the complete services of a fund administrator, this will come at an additional cost. On top of the usual compliance admin services, fund administrators can provide things like investment accounting and access trading platforms to streamline the reporting process. They won’t provide advice on investment decisions or the overall investment strategy but these services can be provided by a financial planner. Complete fund administration costs typically range from $1,100 at the low end and up to $2,800 at the high end, depending on the complexity of the investments in the self-managed superannuation fund.
Investment fees for SMSFs can vary depending on the type of assets in the fund and the frequency of turnover. Assuming the SMSF has a balance of around $250,000 and straightforward investments like listed securities such as shares or ETFs, the annual investment fees could be about $200-$300. When you start to add in more complex investments, real estate assets and larger superannuation funds balances, the cost for investment fees or transaction fees can increase dramatically.
An SMSF accountant is a specialist in the SMSF field and will stay abreast of the latest superannuation rules and regulations to ensure the fund is always compliant. Using a specialised SMSF accountant can have many significant benefits, especially if your fund has a complex investment strategy or holds assets like commercial property or real estate investments. If your SMSF is less complex with a straightforward investment plan and holds assets like listed shares and ETFs, it is still a good idea to seek the guidance of an SMSF accountant when completing the annual tax returns and audit process.
A specialised SMSF accountant has the expertise and experience in dealing with self-managed super funds to get the best possible outcome for trustees by helping reduce tax and help build the fund’s balance. They are only different from regular accountants in the experience and specific training received when working in the SMSF space. Tax minimisation is a crucial component of the SMSF when you start drawing from the fund, and a specialised accountant is in the best position to help with this.
A common question asked is what does an SMSF accountant do? SMSF accountants do much more than just lodge tax returns and prepare financial accounts. They have specialised knowledge about SMSF services, legislation, investments and tax laws. Making the decision to set up an SMSF is a significant decision with regard to your retirement planning, so understanding the landscape and setting everything up correctly is a critical step. Compliance with the SMSF is an ongoing matter. An SMSF accountant will be appropriately equipped with the right skills, knowledge, and accreditation to maintain the fund’s compliance. SMSF accountants and SMSF auditors have to complete training and education each year to keep their professional accounting body registrations, like CPA Australia.
There are a number of once-off setup costs, which include:
SMSF trust deed creation: $200 – $800
Sole-purpose trustee company setup: $500 – $1000
The annual or recurring costs for an SMSF include:
Basic accounting, administration and auditor fees: $800 – $2000
Advanced accounting, administration and auditor fees including advisory services for tax/structure types or provide financial product advice for complex SMSF investments: $1700 – $8000
Company review fee (ASIC) for corporate trustee structure: $56
Supervisory levy (ATO): $259 or $518 for new funds post 2021
A great way to find an SMSF accountant near you is through a professional accounting body. In Australia, the legislation recognises three professional accounting bodies – CPA Australia, Chartered Accountants Australia and New Zealand and the Institute of Public Accountants. Most accounting practices belong to one of these three professional accounting bodies, as well as being a registered tax agent. However, a standalone tax agent may not belong to one of the accounting bodies listed above. Each of the professional accounting bodies has a search function for nearby accounting professionals:General Advice Warning
SMSF Mate is a unique website because it has ideas about how to approach SMSFs, insurance and other financial topics that come straight from first hand experience. It's much more useful than what you find on all the other financial websites that just offer generic info that you could easily get on the ATO's website. It's also nice to know there's no financial incentive behind the information, it's legitimately there to help people understand self-managed super funds and how to get the most out of them, not to get an affiliate commission from a broker or other financial services provider. The investment product information is also incredibly useful, I've never seen this kind of functionality on any other website that let's you look at such a wide range of products, sort by what info is most interesting or important to you, and subscribe to updates for different funds and financial products all in one place. Definitely worth checking out if you own or are considering an SMSF!
SMSF Mate provides a unique insight into superannuation and financial topics in a way that is easier to understand than conventional websites. The colloquial nature of the site makes it easy to understand and they often speak about complicated topics in lamens terms so I can wrap my head around them. The investment product information is a great way to research funds that I am interested in investing in with my SMSF and there is a lot of helpful information on the site for better structuring my investment portfolio. In comparison to other websites which offer similar information, SMSF Mate excels as the information is free to access whereas many other sites charge a subscription fee for the same thing. Overall, I think SMSF Mate is a great resource for SMSF trustees and is worth looking at for a variety of super-related topics. Thanks.