SMSF - What are you paying in accounting fees

[handyandy]

Hi Guys

You may want to have a look at Mclowd, a free SMSF accounting platform: www.mclowd.com which includes a crowdsourced marketplace for SMSF professionals.

Our goal is to drive down the cost of SMSF administration by 70-90%

Any questions don't hesitate to contact us.

Cheers

Ashley

Hi Ashley

Looks like the features are there in the system. The question I have is how do I ensure that my data is secure and I am able to obtain an independent copy of my data.

It's all fine and good giving away the use of the software but unless I have some service level guarantees I would be very reluctant to become dependent on your system.

Further, unless the individual has a high level of knowledge re the accounting needs re SMSF I would think it would be very difficult to instruct the contractors as to what you require. The other side of this is if you are not instructing them and instead are taking guidance then very quickly this whole approach would end up more expensive then a standard accountant approach.

Cheers
Cheers

 

[coastymike]

Probably ok if you dont want any advice as to how to operate your smsf, strategies for purchasing property through your smsf, have a few shares or just cash. Otherwise like all these free things they just don't work in practice. Seen soo many free offerings in my time and most come and go because people sometimes want more than something to plug the data into. They want some quality advice and service as well. Free legal will kits have been around for ages and are useless in my opinion. Maybe better than nothing at all but many times not.

Agreed HandyAndy contractors may have no experience in SMSF and then you want to move from accumulation phase into a TRIP. Contractor goes "ohh **** don't know how to do that"...or worse they "yes sir we can do for $25". then they screw it all up making your fund non complying and you have noone to sue as they are long gone. 46.5% of your assets gone because you entrusted the work to a "contractor" who you have no relationship with and who may or may not have your best interests at heart.

Most successful investors and business owners want and need advice. not a free off the shelf product which they have to learn.

Just had a look at the product and it doesn't look like it lets you produce an income tax return. So what is going to happen your contractor prepares the financials and you give them to a registered tax agent (that is why they probably dont have the functionality for tax returns as you can't prepare and charge for a tax return unless you are a registered tax agent" and then the registered tax agent charges for the review and fix any errors. I cant see how this will make things cheaper at all. In fact fixing mistakes might in fact make it more expensive.

 

[Shaneelastic]

Hi Guys

You may want to have a look at Mclowd, a free SMSF accounting platform: www.mclowd.com which includes a crowdsourced marketplace for SMSF professionals.

Our goal is to drive down the cost of SMSF administration by 70-90%

Any questions don't hesitate to contact us.

Cheers

Ashley

I do not understand how this works.

So I load my Sf details into space? Some accountant from Bangladesh bids at 150 per annum to do the tax return, the auditor whose registered in Australia does the audit for 150 and my costs reduce from 2500 to 300? + ATO supervisory levy?

Why would I pay a professional 16.67 per hour when the they can get more flipping burgers? Whats their PI Insurance Like?

For me, way to many unknows to be stuffing around with, especially when TFN, Bank Accounts etc are all involved

What safeguards are in place that these contractors are legitimate? educated? Have PI Inurance? and are not just scammers?

 

[agent007]

Hi All

As per heading, how much are you paying to do the annual account for your SMSF.

My super fund has asset of about $1.4mil and the assets it holds are about 30 share portfolio, cash, some gold and one managed fund.

I paid $3960 in accounting fees last year!!!

We copy all the bank account statements as at 30/6. We provide copies of all the dividend statement for the year. We provide the password for comsec so a valuation can be determined as at the EOY.

And more to the point have done all the MYOB for the year and reconciled all the bank accounts.

Discussing this with my accountant yesterday (more like tackled him) he BS'ed on about the audit requirements etc

How much work is really left?

Cheers

You don't need an accountant to do your SMSF taxes though, you must have them audited. So, if you have done all the work all that is required to pure and simple data entry. How much your auditor will charge?

 

[coastymike]

Shane

Yes and when the contractor who doesn't have an Australian entity contracting directly with you then uses the TFN, ABN details and all the details of your SMSF fund including all your personal details to then contact the bank to obtain forms allowing them to rollover the cash to a newly formed SMSF account (which the contractor has including copies of your signature on file) it might come as a surprise when your cash balance has been conveniently transferred to some account in the Seychelles.

 

[dghayes]

Hi there,

I am currently paying $450 for the audit & $400 for the return. In the 10 years of having the fund, I have never paid over $1000 for these services. I know that the fees will increase slightly when my SMSF value grows (currently $250K), but I'm inline with what the majority is paying now on this thread. $3960 is over the top, so good on you to seek a change handyandy!
Dave

 

[coastymike]

$250k (probably sitting in cash) compared to HandyAndy's fund which is "$1.4mil and the assets it holds are about 30 share portfolio, cash, some gold and one managed fund."

It is like comparing a mini cooper to a mclaren. The two funds are totally different. So therefore are the costs.

 

[austini]

$250k (probably sitting in cash) compared to HandyAndy's fund which is "$1.4mil and the assets it holds are about 30 share portfolio, cash, some gold and one managed fund."

It is like comparing a mini cooper to a mclaren. The two funds are totally different. So therefore are the costs.

Value of the fund has nothing to do with it. Handy Andy's fund (provided he is not actively trading) is still far from being complex. There are funds with very large amounts invested but this may only be spread across a modest number of shares, LICs, ETFs and few term deposits & debt secuities etc. Therefore cost should be based on complexity rather than the value of the assets.

Depending on the complexity of your fund the following may be worth a look. I don't use them personally as I'm not paying the rediculous fees that some have mentioned. But I know a few people that do and are very happy with them:

http://www.esuperfund.com.au/

$699 including audit. Only requirement is that you use Comsec as a broker (at slightly higher brokerage) and their nominated ANZ transaction account (you can still have other high interest accounts and term deposits etc).

The information on their site is also fantastic.

Where there aren't too many investments (around 15) the following is also quite popular. In this case I also know a number of smsf trustees who are very happy with them.

http://www.supereasy.com.au/

$1,295 including audit.

But in general I would be surprised if handyandy couldn't professionally get the annual administration including audit done for no more than $1,500!

 

[JIT]

Good point austini, complexity not value.
Bit more subjective I guess though.
Look elsewhere handyandy.

 

[monalisa]

I work for a large accounting firm, and at one stage we outsourced our funds to SuperConcepts... here is their fee schedule:

http://www.superconcepts.com.au/images/pdfs/L6288_0512_Super Concepts Accounts Fee Schedule_WEB.pdf

approx $2,500 for a large fund.

They were good with just the processing part, where as we look after the consulting side of things.

They use some other software - not MYOB or QBs.

 

[PaulGTaxAdviser]

Price v's Cost v Value

I will admit I make a living from supporting a lot of SMSFs. But I have to question someone trying the ebay gypsy approach to strategic professional advice and services which support their lifetime retirement savings in the world best tax concession driven scheme. $1.4m and you query a $4K fee? I'm gonna assume you also havent paid an adviser to guide any investmnets too.

If I tried to sell you a Porsche (Coastymike's worth a few bucks more ?) for $70 I bet you would ask "WTF is wrong with it". There are plenty of providers of cheap services who do so for budget prices and valueless services. Strategic advice ?? Its extra of course, maybe its some monkey in a sweatshop who no speakda understad whata supa fundy is....

BTW - MYOB doesnt produce complying financial statements for a fund. Your accountant should have told you that you are wasting YOUR time and inflating his costs by doing that.

I had a new client SMSF arrive. She had been paying $1200 INCL gst, tax, fs and audit done by same accountant (Fail!). Pensions were all cocked up and 40% had stayed in accum when didnt have to. Cost ??? $8000 in super taxs not necessary and pension was not reversionary when husband dies totally scewing up death benefit recontribution plans. Total cost to her has to be $100K or more on her $1.8m fund.

I fixed it all. She was happy to pay more for real work and real advice. Then her husband died. Must say she recognised the value of good work. She can now recontribute another $450K. Happy lady.

Pay peanuts get monkeys.

PS - Handy Andy Dont call me I dont take on cheap clients. Call Somalia SMSF Services.

 

[coastymike]

Medical professionals also have some great opportunities in their smsf not available to other professions. Some very interesting strategies which have recently received sign off by the ato. Ive signed non disclosure agreements so my clients get the benefits but the cheap online providers will never provide this advice. For some people they arent interested which is fine. Should talk to our mutual friend paul. He has some amazing strategies he has just received sign off on. You will need to sign an nda but before we can discuss. These strategies will blow your mind.

 

[handyandy]

I will admit I make a living from supporting a lot of SMSFs. But I have to question someone trying the ebay gypsy approach to strategic professional advice and services which support their lifetime retirement savings in the world best tax concession driven scheme. $1.4m and you query a $4K fee? I'm gonna assume you also havent paid an adviser to guide any investmnets too.

If I tried to sell you a Porsche (Coastymike's worth a few bucks more ?) for $70 I bet you would ask "WTF is wrong with it". There are plenty of providers of cheap services who do so for budget prices and valueless services. Strategic advice ?? Its extra of course, maybe its some monkey in a sweatshop who no speakda understad whata supa fundy is....

BTW - MYOB doesnt produce complying financial statements for a fund. Your accountant should have told you that you are wasting YOUR time and inflating his costs by doing that.

I had a new client SMSF arrive. She had been paying $1200 INCL gst, tax, fs and audit done by same accountant (Fail!). Pensions were all cocked up and 40% had stayed in accum when didnt have to. Cost ??? $8000 in super taxs not necessary and pension was not reversionary when husband dies totally scewing up death benefit recontribution plans. Total cost to her has to be $100K or more on her $1.8m fund.

I fixed it all. She was happy to pay more for real work and real advice. Then her husband died. Must say she recognised the value of good work. She can now recontribute another $450K. Happy lady.

Pay peanuts get monkeys.

PS - Handy Andy Dont call me I dont take on cheap clients. Call Somalia SMSF Services.

Mate - you must be a legend in your own mind.

You go and shoot of your mouth and have not even understood (or bothered to understand) of the background from which I am approaching this topic.

I for one do not and will never see my super as providing my retirement income. It is just a vehicle that was available to stow away a couple of extra dollars from my business income. I stowed away many more dollars in standard investment environments that are not under the governments every whim.

You obviously have a soap box that you are standing on and want to maintain it's financial stability by overcharging poor widows for advice that they could have read on the back of the cornflake packet. ( if they had cared to actually go and look)

If I were to start a pension phase then I would seek further advice (obviously not from you as you are in the habit of over charging and then wanting to get a gold star for being a hero) and in fact presently doing low key research in this area.

But I will make sure that I avoid you and your firm so if you would kindly Pm me your details I will know who to avoid.

 

[PaulGTaxAdviser]

Actually my comprehension levels pretty good. Yawn

 

[PaulGTaxAdviser]

I know the guys at HOW are charging around $1,500 plus audit. Less for less complex funds. Might be worth giving them a call. www.houseofwealth.com.au

Anything cheaper and you won't get a relationship just send in info, punch in the numbers, sign and return and no contact with the provider. Personally I think for the small extra and the fact you see someone and deal with them HOW is providing pretty good value for money.

Mike would you consider talking to A clever tax guy for $500phr or the itp guy doing tax for $70 if you had a bit of a tax problem. Doesnt this equate well to smsf too? I would have thought the guy who is busy and well demanded might be far more an expert than a fob with tafe cert doing smsf processing for $20. Maybe i will open a new practice outside markets

 

[handyandy]

Well, we will just ignore the self interested comments from an accountant worried about losing a lucrative (and mysterious due to the ever changing government goal posts) segment of his business.

We have just submitted our first SMSF return done through Superannuation Accounting Services. (SAS)

Total cost $1150. Compared to $3850 with my previous accountant.

We went and met the accountant at SAS and interacted with them during the preparation as we would with my past accountant. They reviewed the existing documentation and obviously the accounting records. They also forced me to clean up some orphan share holdings which were left behind when we changed trustee some years back.

I am now signing up for SAS's premium SMSF service which allows them to download my relevant banking data and process all transactions on a daily basis.

http://www.superaccounting.com.au/content/ourservices/accounting/premium.html

I will still keep processing my own transactions using MYOB in parallel for at least this current year and possibly the next year.

As has been mentioned, I am not depending on them for investment advice but only a recording and tax preparation service meeting all the statutory requirements.

There are many different SMSF service providers as have already been mentioned by various posters. You do need to understand the fee structures of these providers before engaging them. Some appear to reduce your costs but then will incrementally add back fees and potentially arrive back at a must larger bill then your own accountant is charging.

For example Supereasy allow 15 investments for a flat fee of $1295. Within their context each share you hold is counted as an independent investment (rather than treated as a portfolio) so with 30 shares in my portfolio their charge would be $1295 + $44 per addition share in the portfolio. Thus their fees quickly add up - $1295 + ($44 x 15) = $1955 and this is without adding other items (which we have in the SMSF) and the associated fees.

Cheers

 

[MTR]

Well, we will just ignore the self interested comments from an accountant worried about losing a lucrative (and mysterious due to the ever changing government goal posts) segment of his business.

We have just submitted our first SMSF return done through Superannuation Accounting Services. (SAS)

Total cost $1150. Compared to $3850 with my previous accountant.

We went and met the accountant at SAS and interacted with them during the preparation as we would with my past accountant. They reviewed the existing documentation and obviously the accounting records. They also forced me to clean up some orphan share holdings which were left behind when we changed trustee some years back.

I am now signing up for SAS's premium SMSF service which allows them to download my relevant banking data and process all transactions on a daily basis.

http://www.superaccounting.com.au/content/ourservices/accounting/premium.html

I will still keep processing my own transactions using MYOB in parallel for at least this current year and possibly the next year.

As has been mentioned, I am not depending on them for investment advice but only a recording and tax preparation service meeting all the statutory requirements.

There are many different SMSF service providers as have already been mentioned by various posters. You do need to understand the fee structures of these providers before engaging them. Some appear to reduce your costs but then will incrementally add back fees and potentially arrive back at a must larger bill then your own accountant is charging.

For example Supereasy allow 15 investments for a flat fee of $1295. Within their context each share you hold is counted as an independent investment (rather than treated as a portfolio) so with 30 shares in my portfolio their charge would be $1295 + $44 per addition share in the portfolio. Thus their fees quickly add up - $1295 + ($44 x 15) = $1955 and this is without adding other items (which we have in the SMSF) and the associated fees.

Cheers

Hi HA
Thanks for sharing this information, something I would certainly look into myself.

MTR

 

[austini]

Actually my comprehension levels pretty good. Yawn

In all my years on the Somersoft forum and having used a couple of excellent professional accountants sourced from this forum (and still using one) I have never come across a professional so full of themselves as the above. There's no way I would ever want to do business with such a person and we have certainly never had an issue paying good money for excellent advice. And the relationships were/are still excellent. But when it comes to SMSF's some of the fees being charged for pretty damn basic stuff are way over the top.

In regard to paying peanuts blah, blah, blah it can often be the case that some attractively priced dedicated specialist SMSF service providers will have better knowledge on the subject than some accountants who are trying to keep abreast of a far greater range of accounting areas. So to criticise other SMSF service providers as being monkeys because they are not charging around $4K or so is an insult to them and says a lot about the person making such claims.

Good on you HandyAndy for finding a professional service provider who is charging a realistic fee for the work involved with your very straightforward SMSF.

 

[buster]

Mike would you consider talking to A clever tax guy for $500phr or the itp guy doing tax for $70 if you had a bit of a tax problem. Doesnt this equate well to smsf too? I would have thought the guy who is busy and well demanded might be far more an expert than a fob with tafe cert doing smsf processing for $20. Maybe i will open a new practice outside markets

Nah, they are usually just good at spruiking and self promotion. I know plenty of people who pay a fortune for high profile accountants yet get poor advice ,and they dont know there is a better way of doing things. Popularity doesnt neccessarliy mean better. Just because something is cheap it doesnt mean it is bad. I changed from a high profile highe fees accountant,( who by the way is in jail now on fraud charges), to a low profile cheaper one to find out I was paying tens of thousands uneccessarily in tax.

 

[SMSFguy]

Nah, they are usually just good at spruiking and self promotion. I know plenty of people who pay a fortune for high profile accountants yet get poor advice ,and they dont know there is a better way of doing things. Popularity doesnt neccessarliy mean better. Just because something is cheap it doesnt mean it is bad. I changed from a high profile highe fees accountant,( who by the way is in jail now on fraud charges), to a low profile cheaper one to find out I was paying tens of thousands uneccessarily in tax.

Just to add some fuel to this post. We had a client who's previous high profile accountant was practising in Canningvale WA (he is no longer practising because he is now serving jail time for fraud). You wouldn't believe it, the client brought in 13 years worth of SMSF financials and tax returns etc. When we went to check the client's ABN on the SuperFundlookup website it showed a totally different SMSF and nothing was coming up on the Tax Portal (Note the fund was established in pre-2000 before the ABN's came in, but must have slipped from the transition to ABN).

Further investigation showed this fund had not lodged for the entire 13 years, so all the financials and tax return were essentially doctored. We ended up having the client's disclose and settle with the ATO based on summarised figures, which ended up being a fair resolution and no ATO penalities. Good guy Tax Commissioner.