SMSFs have the potential to generate better returns, at a lower cost, than an industry or retail super fund. However, there are still several arguments against them. There’s a complexity to SMSFs, particularly around compliance, and there’s a certain knowledge and experience that’s required when managing your own investments successfully. While these arguments are salient, they are countered by experienced SMSF administration help.
Make sure you’re on the right side of the law
To paint a picture of what’s involved when it comes to SMSF administration, let’s take a brief look at the obligations of the trustees:
- Signing a declaration to the ATO that indicates you are aware of your responsibilities.
- Appointing an independent, ASIC-licensed auditor.
- Making sure the SMSF is set up with a trust deed.
- Paying the ATO supervisory levy.
- Valuing assets at the current market value.
- Reporting any trustee or fund member changes.
- Maintaining all records, both financial and general.
- Complying with event-based reporting.
As with all regulations, there are penalties involved when they aren’t complied with. A lot of the time when penalties are handed down, it has to do with ignorance rather than negligence. For example, the introduction of the Transfer Balance Cap and associated tax changes has impacted Transition to Retirement plans. This led to a number of auditor contribution reports being issued to some SMSFs. Compliance is one of the most important reasons to seek professional advice with your SMSF administration.
You don’t know what you don’t know
As we’ve said, most infringement notices are handed down to SMSFs because the trustees weren’t aware of something they needed to do (or did something they didn’t realise was against regulations). Getting professional help with your SMSF is the best, and most efficient, way to navigate successfully the complex world of self-managed superfunds.
We get it – you want an SMSF to regain control of your money and your future, so seeking advice may seem like you’re handing back the reins. But this isn’t the case. We are simply your guides in an unfamiliar world. When you work with us, you stay compliant and you get the most out of your resources.