SMSF Costs

Fees and expenses explained

SMSF running costs

The overall running costs vary depending on the assets held by the self-managed super fund, and of course, the more complex an SMSF is, the higher its overall costs are likely to be. 

Source ATO

Take care of fixed costs

In general, SMSF costs can be broken down into:

• Setup costs
• Ongoing costs

Both contain significant fixed costs for SMSFs, a contrast with industry super funds which tend to charge on a percentage of your assets.

Even with the cheapest SMSF establishment services, high recurring costs can end up making the SMSF more expensive in the long run.

How much does it cost to set up an SMSF?

The cost of establishing a self-managed super fund will depend on the amount of work required to set it up. For example, the costs for a simple, single-member fund with only a few different asset types would be lower than a fund with two members and lots of asset categories to consider.

In some cases SMSF service providers may lower the start-up costs artificially to entice customers into more expensive ongoing management contracts. Always compare the fees a service provider charges against other comparable providers to ensure you are getting the most competitive rate.

Are SMSF setup costs tax deductible?

No. The ATO regards start-up costs as capital expenses, and therefore they are not deductible or amortisable.

Annual and ongoing SMSF running costs

Once the SMSF has been set up, there will be ongoing annual costs for maintaining the fund and complying with ATO regulations:

• Auditing fees
• Accounting fees
• Bank fees
• Tax return preparation and lodgement fees
• Investment advise and/or financial planning fees (for some)
• Professional management fees (for some)

SMSF audit fees

Every SMSF must be professionally and independently audited each year, it is a legal requirement. Some providers do offer cheap SMSF audits, however, as with any professional service, cheap does not always mean good value.

Other professional fees

If a trustee is experienced in finance and accounting, then it is possible that these areas can be covered by the trustee, however, if the trustees do not have the time, experience, or knowledge to manage the accounting, reporting, and/or investment strategies, then professionals would need to be engaged.

Some running costs of an SMSF

Source ATO

The more complex an SMSF is, the more its ongoing expenses are likely to be.

Wind up costs

Winding up costs can be quite substantial. For that reason, wind-up costs should be included in your assessment of whether an SMSF is right for you.

A cheaper alternative

After adding up the costs of establishing and running an SMSF, you may find that it is cheaper and easier to achieve control over your super within an industry fund. Check out your fund’s login area to see.

References
SMSF costs - ATO
Auditor costs - ATO