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Are you thinking about using a self-managed super fund (SMSF) service to help you get your SMSF up and running? SMSF establishment services can offer a number of benefits, but there are a few risks to be aware of too.
We'll outline what these services are as well as the key benefits and risks of using an SMSF service in this guide.
An SMSF service is a product offered by some companies and financial institutions to assist people who are looking to start their own SMSF. These services can differ between companies, but they usually offer support with establishing your SMSF and trustee structure and help with opening dedicated bank accounts and trading accounts in your fund's name. Some SMSF services also provide ongoing admin and reporting support to help your fund meet its tax obligations.
SMSF set-up and admin solutions can offer some or all of the following services.
An SMSF service can help you set up your SMSF from the start including registering it with the Australian Taxation Office (ATO) on your behalf and setting up the fund's Australian Business Number (ABN) and Tax File Number (TFN). The service can also help your fund establish its trust deed and set up the trustee structure.
An SMSF service can help you open dedicated bank accounts and online investment trading accounts for your SMSF. As your SMSF will operate as a type of trust, you cannot use your existing, personal bank accounts.
Instead of having to contact your existing super fund and organise for your balance to be rolled over to your new SMSF, an SMSF service can do this for you and the other SMSF members (if there are any).
Managing an SMSF comes with a lot of admin work to ensure it remains complaint, which you can read about in our separate guide. An SMSF service can help manage the ongoing administration of the fund, and ensure the fund is meeting its reporting obligations with the ATO.
As well as general ongoing admin support, an SMSF service can help your fund prepare its annual financial statements and lodge its tax return with the ATO.
Your SMSF needs to be audited each year to remain compliant with the ATO. An SMSF service can help facilitate this audit by linking your fund with a professional SMSF audit service (or sometimes the SMSF service may offer auditing services itself, too).
An SMSF service can help your SMSF keep on top of its investments and member contributions via online reporting tools, dashboards and reports. These can also be shared with your fund's accountant, for example, to assist the fund with its tax reporting.
No, you're not obliged to use an SMSF service and it is not compulsory to do so. They're an optional service for anyone starting an SMSF who wants some extra help getting the fund established and with meeting the ongoing legal obligations set by the ATO. These are paid services that usually attract some initial setup fees as well as an annual fee.
SMSF services can cost anywhere from a few hundred dollars to more than $1,000 a year. The cost varies from service to service and can depend on what's included in the service you opt for.
For example, if you opt for an SMSF service that helps get your fund established with no ongoing admin or reporting support, it'll be cheaper than a full-solution service that includes things like your annual SMSF audit fee.
Looking for more information on SMSFs? Our dedicated SMSF hub has lots of information on how to set up your SMSF, what fees and costs you can expect to pay, how to choose your trustee structure and how to develop your fund's investment strategy.
The information and general advice in this guide is neither an endorsement of, nor recommendation for, self-managed super funds. Obtain independent financial advice and consider your own circumstances. SMSFs involve additional administrative and legal obligations. For more information about the risks and liabilities, visit the ATO's website.
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