When it comes to setting up a self-managed super fund (SMSF), one of the biggest concerns is how to choose the right SMSF service provider to handle the fund for you. While online providers offer a reasonable price, their access and professionalism is questionable as they are available online only. If you’ve checked out numerous SMSF service providers but are still unsure who to go with, here is what to look for when setting up your super fund.
A useful tip when evaluating the reliability of any SMSF service provider is to figure out how long the firm has been on the market. If, let’s say, the provider has been on the market for only two years or so, be cautious, unless the individual who runs the business has longer experience. If you are not sure, find out who owns the business and his/her working experience.
There are many offline and online SMSF service providers that offer fund establishment services, compliance services, ongoing administration and one-off transactions. Some of the service providers may be owned by a financial organization and most of them have relationships with adviser groups. Other administrators can even offer you financial products.
Think twice before signing up with a SMSF service provider that provides a complete package arrangement that usually includes a wrap account service for your investments, an auditor, a financial adviser, a tax agent, and an administration service for your compliance requirements. Such arrangement can cost you lots of money. Furthermore, some service providers may charge a percentage of your account balance for an administration service, or a flat fee or even an hourly fee.
If you opt for a package deal, your best option will depend on what the provider offers you for your money. To know which service provider delivers the best value, ask the following:
- If there is any advice component;
- What are the SMSF establishment costs including trust deed;
- What are the running costs (annual audit, administration and reporting);
- If there is any other costs included in the fee;
- Any other possible cost that may arise that is not included in the package.
When you choose an online service provider, the establishment costs of a SMSF is usually cheaper. But be careful, as usually, the lower price means higher-end-services later.
Overall, deciding on a SMSF service provider (online or offline) mostly depends on your personal needs, and even more, on how complex your fund is.