Starting a SMSF

Received in the mail a letter from hubby's Super Fund notifying that they will charge a low administration fee of .06% calculated on the daily account balance etc. as from 12.8.2009

Bugger me that is about $1800 per year on a super fund that is invested in cash atm.

We planned on starting a SMSF - now I will contact Accountant on Monday to start one. We have previously discussed starting SMSF.

The trust deed will be broad.. shares property etc. I plan to buy some shares shortly and then sell out and buy/build property later.

Re: Shares don't worry too much about advising me as I have been buying and selling shares since 2000 - so have experience in profits & losses & money management.

QUESTION
Main issue is which bank etc. has the best rates for SMSF at present as I need to open an account?

Information on IR received most welcome...


Kind Regards
Sheryn
 
It will probably cost a lot more than that to set up and run an SMSF.

Compliance costs have gone up substantially in recent years due to increasing regulation. Those fees are not going to drop.

Don't do it to save money. You would do it only if you can do better with the money than your fund.
 
I dare say that with a super balance of $3mil ($1800/.06%), $1800 is stuff all for someone to manage it....even if its in cash.

We certainly haven't got a super balance of $3mil

.6% not .06% as you have above.

The other little sentence which I didn't like in letter from Super fund was for people who have account balances over 500K in the Super Balance - they could apply for a fee rebate - for further information visit xxx website.

Obviously hubby's account balance is less than 500K
 
It will probably cost a lot more than that to set up and run an SMSF.

Compliance costs have gone up substantially in recent years due to increasing regulation. Those fees are not going to drop.

Don't do it to save money. You would do it only if you can do better with the money than your fund.

Geoff

I know I can do better with the money than the fund. I have been watching the weekly increases in hubby's super since he retired - when there was no charge for 90 days.

His super was going up about $100 per week, I reckoned it should have gone up $208 per week if money was invested at 3.75%.

I think I can possibly get 4%.

Not game to open a new SMSF account with our mortgage fund where we were are receiving 5% distributions quarterly as mortgage fund money is frozen & we can only get small redemptions out.

I am not looking forward to the additional paperwork, reading researching of SMSF etc but I know I can do better and will have to pay about 4K to start & audit SMSF this year.


Sheryn
 
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QUESTION
Main issue is which bank etc. has the best rates for SMSF at present as I need to open an account?
Kind Regards
Sheryn

Sheryn

The Which bank account question should be decided from what you want to do with your super.

For example, if you wanted to be trading shares using COMSEC, the most flexible arrangement would be to have an account with CBA.

If you simply wanted to put your super in a savings account and the money to be available on call then perhaps rabobank would be best
http://www.raboplus.com.au/diy_super/default.aspx

I have most of mine with STgeorge for convenience more than anything else.
The returns are 4.5% for 3 months and drop to their standard 3.2% after that.

3.2% is very low IMO considering that they are charging us 5.75% (or more ) for a SMSF loan so later on I'll consider opening a 2nd account with another bank.

cheers
 
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Bill


Still thinking...

1. Immediate short term - good interest rate of at least 4%.

2. Short term possibly - set up share trading account and buy/trades shares with a small % of funds.

3. Look for a property [house or unit] to buy possibly outright or with a loan [I have read that SMSF minimum loans of 200k which is OK.]

4. Buy land and build duplex - not on the cards time-wise atm

5. Buy a property with potential to build again on property in future eg granny flat.


Longer Term
I am leaning towards buying something outright with potential to build on at a later date.


I trade our personal accounts via CommSec now with margin accounts [not in use atm and only trading one account not 2 atm].

Most of our IP loans are now with WBC and as St G is part of WBC, I probably should diversify to another bank.


Sheryn
 
Reminds me of the crash in Super of years gone past, sorry, the market tanked you've lost a bunch of money, please pay 6% for this privilege and we'll have a crack again next year

At the casino, at least you may have some fun losing it yourself ;)
 
Your original post introduced the figure of .06%

Oops [apologies] :eek: - don't let me loose with money or figures!

We saw our Accountant at lunchtime and the paperwork has begun to start SMSF.

Also I emailed the Financial Planner at the super fund to say 'thank you' as he has been a great help over the years. He spoke in a way I could understand.

Found via internet that I we can get 4.3% on 4 month term deposit or 4.5% on 12 months. I think we will go for 4.3% for 4 months.

One think I hadn't taken into consideration is when we start pension phase we must take out 4% minimum - this will have me thinking a bit harder about property, shares, cash.



Cheers
Sheryn
 
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OK

We opened a new account in the name of the Super Fund at Credit Union and have deposited hubby's super cheque.

Cheque won't be cleared till next Monday.

Have opened account with CommSec to purchase shares.

PLAN
Roughly splitting hubby's Super money into 3 portions.

2 portions invested in cash in short term deposits (so that we can take advantage of interest rate rises frequently) and 1 portion invested into shares.

Will subscribe to 'The Chartist' for super purchase recommendations and I will be responsible for our own decisions as to what shares to purchase. This will meet arms length requirements.

At end of year

I will put most of my small amount of super into our own SMSF but keep a small portion in employer super fund for insurance benefit.


Cheers
Sheryn
 
I would be switching out of Commsec who have to be the most expensive on line broker going around. Look at Bell or IB.

I have been with IB for 10 years and their platform and commission rates are second to non.
 
Smsf

Sheryn

I had an SMSF set up a few months ago after being disappointed with the performance of my previous long term fund (CFS).

The objective for my fund was to try to achieve +15% annual returns.

I have a max of 10 stocks and bought into these in July and August. It took several weeks to open these positions.

The portfolio is up over 20% already in less than 3 months. I use Comsec and pay $29.95 on trades >$10k. I don’t look at dividends, but have been pleasantly surprised with some of the recent final dividends and even better with the franking credits for the super fund.

I know the market can change, but I suggest you set your sights a lot higher than term deposit rates.

I use Allan Hull’s “ActVest” strategy (see his book ‘Active Investing’) and spend no more than 30 minutes per week checking and readjusting my SMS alerts on stop losses and sell targets. If my weekly checks highlight I need to buy or sell one or two stocks, it may add 15-30 minutes during ASX hours.

My accountant will sort out the returns and arrange EOY audit etc.

I used a BWA account to roll over previous funds and maintain a minimal amount in this to cover annual Life Cover premium. I use Comsec’s CCA and CIA accounts for holding share proceeds.

I quite enjoy it and have been learning heaps and certainly prefer having control over my super fund. I highly recommend disciplined people running their own SMSF.

I am also using a similar strategy using LOC funds as a means of supplementing my living expenses.

Good luck
 
I would be switching out of Commsec who have to be the most expensive on line broker going around. Look at Bell or IB.

I have been with IB for 10 years and their platform and commission rates are second to non.

Thanks Qlds007.

Have also heard IB is good. My ex broker recommends IB too but I am too busy to learn how to navigate another website this year. Will slot it in for late 2010

I have tried a few other brokers Westpac, Macquarie but I like CommSec's site


Sheryn
 
Sheryn

I had an SMSF set up a few months ago after being disappointed with the performance of my previous long term fund (CFS). Guess CFS is Colonial First State

The objective for my fund was to try to achieve +15% annual returns.

I have a max of 10 stocks and bought into these in July and August. It took several weeks to open these positions.

I plan to buy 10 stocks too

The portfolio is up over 20% already in less than 3 months. I use Comsec and pay $29.95 on trades >$10k. I don’t look at dividends, but have been pleasantly surprised with some of the recent final dividends and even better with the franking credits for the super fund.

I know the market can change, but I suggest you set your sights a lot higher than term deposit rates.

I use Allan Hull’s “ActVest” strategy (see his book ‘Active Investing’) and spend no more than 30 minutes per week checking and readjusting my SMS alerts on stop losses and sell targets. If my weekly checks highlight I need to buy or sell one or two stocks, it may add 15-30 minutes during ASX hours.

I read Allan's book a few years ago

My accountant will sort out the returns and arrange EOY audit etc.

I used a BWA account to roll over previous funds and maintain a minimal amount in this to cover annual Life Cover premium. I use Comsec’s CCA and CIA accounts for holding share proceeds.

Have opened a CCA and CIA accounts and renamed Super CCA and Super CIA

I quite enjoy it and have been learning heaps and certainly prefer having control over my super fund. I highly recommend disciplined people running their own SMSF.

Agree

I am also using a similar strategy using LOC funds as a means of supplementing my living expenses.

Would love info on how you are doing this?

Good luck

I use Metastock software and Paritech data as well, I will subscribe to a SMSF newsletter as my Accountant has told me twice not to 'trade' shares.


Super Fund cheque has been deposited in Credit Union Account - I wonder what happens to the money in the 4 business days it takes to appear in our SMSF account after banking the cheque?



Kind Regards
Sheryn
 
I use Metastock software and Paritech data as well, I will subscribe to a SMSF newsletter as my Accountant has told me twice not to 'trade' shares.

Not quite sure what your accountant is referring to or why you need a specific SMSF newsletter?:confused:

Whilst I currently hold 10 stocks, I have bought and resold a number that were not meeting requirements. I'm sure by end of financial year I will have turned over many more. For an SMSF its important to have a written investment strategy and as long as you comply with this ............


Super Fund cheque has been deposited in Credit Union Account - I wonder what happens to the money in the 4 business days it takes to appear in our SMSF account after banking the cheque?

OPM. The bank likes using it as much as most of us do!:eek:

For personal investment, I also subscribe to the Southern Cross and ActTrade newsletters (very different) plus a few speculatives here and there.

All the best

Joe D
 
I use Metastock software and Paritech data as well, I will subscribe to a SMSF newsletter as my Accountant has told me twice not to 'trade' shares.


Super Fund cheque has been deposited in Credit Union Account - I wonder what happens to the money in the 4 business days it takes to appear in our SMSF account after banking the cheque?



Kind Regards
Sheryn

What were the accountants and auditors fee's for the SMSF in comparison to the 6% Sheryn?
 
$29.95 is ridiculous with IB it is $6 / leg.

Commission considerations are really important especially when you are frequently trading in your SMSF.
 
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