Q: My wife and I are considering establishing our own super fund to be overseen by a licensed adviser. I asked two advisers for a quote on the set-up costs for a self-managed super fund. The first adviser charges approximately $8000.00; the second considerably less — about $1500. Which do you think would be the better option?
Based on the information that you have provided, an $8000 fee for advice on $600,000 in assets (assuming they all move into your super fund) works out to be 1.3% of your fund’s assets but I’m guessing that the fee quoted involves set-up costs, annual running costs and perhaps a general financial plan.
The difference in quotes is huge, but which service is the better option really depends on what you get for your money. Ask each adviser to itemise the following:
- Advice component (if any).
- Establishment costs (including trust deed).
- Running costs, such as administration, reporting (including annual audit) and lodgement.
- Any other costs that are included in the fee.
- Any other costs that may arise that are not included in the fee.
You can then compare which adviser is the most cost-effective, but cost is only one factor when selecting an adviser and/or an SMSF service.
Note: Ask the adviser to separate the costs relating to running an SMSF and other advice relating to non-super assets. Also check whether the adviser accepts commissions, and whether such commissions influence the advice that you receive from the adviser.
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