# High SMSF accountant's fee



## RogueTrader273

My accountant has just prepared my tax return for my SMSF and mailed me a bill along with the tax papers to sign for a bit less than $3000 (includes audit). This seems an outrageous amount for an SMSF that has only switched funds of around $200k from one bank account to another and made a couple of dozen share trades. 

What are my obligations here please? Obviously he's due some amount for the work he's done, but there's no way it's worth that much! Frankly I just want to get shot of this guy and switch to somebody who charges a reasonable rate without trying to gouge me. Btw I only made a profit of a few thou from the trading.  Thanks in advance!


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## tech/a

RogueTrader273 said:


> My accountant has just prepared my tax return for my SMSF and mailed me a bill along with the tax papers to sign for a bit less than $3000 (includes audit). This seems an outrageous amount for an SMSF that has only switched funds of around $200k from one bank account to another and made a couple of dozen share trades.
> 
> What are my obligations here please? Obviously he's due some amount for the work he's done, but there's no way it's worth that much! Frankly I just want to get shot of this guy and switch to somebody who charges a reasonable rate without trying to gouge me. Btw I only made a profit of a few thou from the trading.  Thanks in advance!




Ask him for an itemized written justification of his account.


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## Julia

RogueTrader273 said:


> My accountant has just prepared my tax return for my SMSF and mailed me a bill along with the tax papers to sign for a bit less than $3000 (includes audit). This seems an outrageous amount for an SMSF that has only switched funds of around $200k from one bank account to another and made a couple of dozen share trades.
> 
> What are my obligations here please? Obviously he's due some amount for the work he's done, but there's no way it's worth that much! Frankly I just want to get shot of this guy and switch to somebody who charges a reasonable rate without trying to gouge me. Btw I only made a profit of a few thou from the trading.  Thanks in advance!



You are experiencing the result of not having asked for a written quote before committing to have the work done.
I did the same many years ago in that I accepted a verbal quote for the work, naively assuming the accountant regarded that as a firm price.
She did not.  And I received a bill for almost twice as much as the verbal quote.

Did you get any sort of quote before giving the OK to go ahead with the work?


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## Muschu

tech/a said:


> Ask him for an itemized written justification of his account.




I agree. At this stage I suggest you need the hours worked by various parties (includes secretarial work) and the hourly rate for each.
ie:  $X/hour for accountant; $Y/hour for clerical input etc.
Auditor's fee should be a separate item.

The fee may or may or may not be excessive - but you need more info.

Julia's point is important.  I always ask for a quote.  If that is within my expectations I find no need to ask for the finer detail.... But I have been with the same firm for quite some years.  They want my business and don't go over the top.  I don't ask for a written quote any more and the accountant has been true to his verbal quote.  

Regards

Rick


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## RogueTrader273

Yes it's true, I was foolish and naive enough to trust an accountant not to present me with an outrageous bill - I won't be so stupid in the future!   Safest just to assume they're all dishonest lying b*****d's until proved otherwise...


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## Julia

RogueTrader273 said:


> Yes it's true, I was foolish and naive enough to trust an accountant not to present me with an outrageous bill - I won't be so stupid in the future!   Safest just to assume they're all dishonest lying b*****d's until proved otherwise...




Isn't that a little unreasonable?   Others have confirmed that they pay a similar fee.  I have had quotes for up to $5000 for what I now pay around $2000 for.  It is an unregulated industry as far as fees are concened.
Would you go to a mechanic and say 'hey, my car needs this, this and this done, please fix it' without asking for a cost estimate?
No different buying a service from an accountant.   
If you were to get him to provide an itemised account, I'm sure we'd all be interested to see how the charge has been justified, and it might help you feel better about either paying it or asking for it to be modified if you still feel it is unreasonable.


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## RogueTrader273

Actually I think he's trying to treat my account as his own ATM.  How on God's earth can you justify charging nearly $3000 to advise the ATO of a change of bank account and some share trades? (With all details provided on a spreadsheet.)  It's just legalized theft and I feel I'm being taken for a sucker.  For instance eSuperFund I'm told does a great job including audit for only $700.


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## elbee

Whether a particular fee is justified or not can only be determined with full knowledge of the facts.

I presume from your comments this is the first time this accountant has done work for your fund but you don't say if the fund is new or if it has been audited before.

Some accountants are set up to handle SMSFs efficiently, some aren't and don't particularly want the work. There are special requirements on SMSF auditors.

Taking on a SMSF audit initially requires a good deal of work in ensuring the fund has been set up correctly and the trust deed and minutes etc are appropriate. How records are presented to the accountant can have a big impact on the fee as a great deal of time can be spent recreating transactions if the records are not in a logical or consistent manner.


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## RogueTrader273

This is about the fourth time with this accountant, so it's already set up.

The audit is outsourced to a guy who charges between $300 - $400, and the last
year's return cost me about $2000, which is still pretty high for a fund which is 
pretty static.


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## Miss Hale

We used to pay the same amount for our SMSF, it sounds to me like the standard accountant's fee for this work.  One of the reasons we got rid of our SMSF.


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## Julia

RogueTrader273 said:


> This is about the fourth time with this accountant, so it's already set up.
> 
> The audit is outsourced to a guy who charges between $300 - $400, and the last
> year's return cost me about $2000, which is still pretty high for a fund which is
> pretty static.



Pretty static?  Earlier you described a couple of dozen transactions, didn't you?
So what are you doing about it other than complaining on here?
Have you phoned him and asked for an appointment to discuss the bill where you can express your disquiet and give him a reasonable opportunity to explain how the cost was arrived at?


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## Ves

From the little information provided this fee seems reasonable and about the industry average if there were multiple bank accounts (with transfers), monthly interest on both, a few dozen share trades etc.


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## RandR

Ves said:


> From the little information provided this fee seems reasonable and about the industry average if there were multiple bank accounts (with transfers), monthly interest on both, a few dozen share trades etc.




Expectation ....... meet reality


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## RogueTrader273

Ves said:


> From the little information provided this fee seems reasonable and about the industry average if there were multiple bank accounts (with transfers), monthly interest on both, a few dozen share trades etc.




Ves - I've been discussing this on several forums and so far the only people who thought the fee was
fair were accountants.  Are you an accountant Ves? 

Though one accountant who charges $1500 told me "Mate - you have been ripped off ."
http://invested.com.au/5/high-smsf-accountants-fee-40089/#post87501

Julia - static as in I'm not investing in a bunch of different areas, so it SHOULD 
be fairly simple.  Two dozen trades sent to him on a spreadsheet shouldn't be
difficult to process, unless he's doing it manually, which is then his own fault
for not getting decent software.

What am I doing?  So far I'm waiting on an itemized account...


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## Julia

RogueTrader273 said:


> Ves - I've been discussing this on several forums and so far the only people who thought the fee was
> fair were accountants.  Are you an accountant Ves?







> Julia - static as in I'm not investing in a bunch of different areas, so it SHOULD
> be fairly simple.  Two dozen trades sent to him on a spreadsheet shouldn't be
> difficult to process, unless he's doing it manually, which is then his own fault
> for not getting decent software.



I've been surprised at the information that is required to be included in the SMSF tax return.  Certainly not required by me as the client, but demanded by the legislation.  But you'd imagine there would be the appropriate software available to minimise the time taken to provide this.



> What am I doing?  So far I'm waiting on an itemized account...



Thanks:  hope you'll share it with us when it arrives.


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## RogueTrader273

A quick look at Ves's previous posts and I find: "I'm a Fund accountant specialising in SMSF."
Who woulda thunk?   Yes Ves, OF COURSE all you bean counters deserve to be paid at
brain surgeon rates - not!


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## Ves

Julia said:


> But you'd imagine there would be the appropriate software available to minimise the time taken to provide this.



Nah, that's not the problem.   It's the fact that you have to check, reconcile, balance, verify.... or basically go over every single with a fine comb. It's not like business services where you only check or reconcile the highly material accounts.

I can't rely on your spreadsheet. It is not third party documentation.

The processing is cake.   The workpaper file for the auditor (and of course for the ATO if they even want a sneak peak) is where the fun begins. The compliance review checklists are tedious. We have to do minutes and "cover your ****" pieces of paper for every small thing now. If you don't have them the CPA or CA generals come wandering into your office come compliance audit time and tell you to fix your processes.  The legislation and ATO regulations are so damn convoluted that is necessary.  All of this was made clear to you when you signed the trustee declaration and read the "welcome to life as a SMSF trustee" package the ATO gives out and papers all over their site.

The average accounting firm will only have an SMSF fee base of $500k-1 mil per year. In most cases it could be a lot less.  40% of this will be taken up in overheads. To get accounting software that is not full of what I would consider technical issues you would be paying in excess of $50,000-$100,000k a year. The small firms, because this is a specialist industry now, will probably not realise there are too many technical issues, but they may find that the software often does strange things. A small show isn't going to afford highly sophisticated software because the scale is just not there.

The whole industry is a joke - I said the fee seemed reasonable considering what the industry charges, not that I actually think it's fair.  I actually feel insulted by the OP, considering I probably earn less than he does.

If you think you are being charged too much by the industry buy a single user software license and do it yourself. Then go down the road to your friendly two-bob auditor and get the thing signed off.  Actually it pisses me off that you don't - because I have to deal with smart arses like you day in and day out.


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## IFocus

I pay around $1500 to $2K,   $3K seems excessive to me but you need to get their side of the story why 1st IMHO.


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## Ves

IFocus said:


> I pay around $1500 to $2K,   $3K seems excessive to me but you need to get their side of the story why 1st IMHO.



Depends.  A lot of firms who charge that much cut a lot of corners.  You probably will never know, either. Not trying to scare you - just stating what I've seen.  I've received accounts for Funds that we have taken the admin over for in the past that scared the **** out of me.


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## Ves

Screw this whole debate.  Now I feel angry.  Reminds me of Monday morning not the weekend.


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## nulla nulla

Put it in perspective and move on. The accountant would be only too happy to sit down with you and provide you with a breakdown of the hours worked, the templates applied and probably the discount allowed culminating in the final account. They may even be prepared to allow a discount for promt payment. Further, in the course of your discussion, they may be interested in advising you of the records maintenance you could do prior to the next tax return to assist you in mimimising their fees. It is all about communication and getting off your bum.

You get what you pay for. Stop whinging about a professional applying a reasonable fee for unwinding your mess so that you are in compliance with statutory requirements.  Nothing personal.


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## craft

Ves said:


> Nah, that's not the problem.   It's the fact that you have to check, reconcile, balance, verify.... or basically go over every single with a fine comb. It's not like business services where you only check or reconcile the highly material accounts.
> 
> I can't rely on your spreadsheet. It is not third party documentation.
> 
> The processing is cake.   The workpaper file for the auditor (and of course for the ATO if they even want a sneak peak) is where the fun begins. The compliance review checklists are tedious. We have to do minutes and "cover your ****" pieces of paper for every small thing now. If you don't have them the CPA or CA generals come wandering into your office come compliance audit time and tell you to fix your processes.  The legislation and ATO regulations are so damn convoluted that is necessary.  All of this was made clear to you when you signed the trustee declaration and read the "welcome to life as a SMSF trustee" package the ATO gives out and papers all over their site.
> 
> The average accounting firm will only have an SMSF fee base of $500k-1 mil per year. In most cases it could be a lot less.  40% of this will be taken up in overheads. To get accounting software that is not full of what I would consider technical issues you would be paying in excess of $50,000-$100,000k a year. The small firms, because this is a specialist industry now, will probably not realise there are too many technical issues, but they may find that the software often does strange things. A small show isn't going to afford highly sophisticated software because the scale is just not there.
> 
> The whole industry is a joke - I said the fee seemed reasonable considering what the industry charges, not that I actually think it's fair.  I actually feel insulted by the OP, considering I probably earn less than he does.
> 
> If you think you are being charged too much by the industry buy a single user software license and do it yourself. Then go down the road to your friendly two-bob auditor and get the thing signed off.  Actually it pisses me off that you don't - because I have to deal with smart arses like you day in and day out.





I think the industry represents terrible value for money so have gone the DIY route.


Compliance and accounting software. Trustee edition of Simple fund costs $445. 




> *BGL's Simple Fund is an award winning software solution used to maintain over 75% of Australian SMSF’s. It is Australia's leading SMSF compliance solution, with over 300,000 funds with assets in excess of $90 billion maintained on Simple Fund*.





Last audit cost $225. My two-bob auditor happens to be a “registered company auditor” but maybe he got that highest of audit qualifications from a Weet-Bix pack.

Supervisory Levy $200 – unavoidable no matter how you tackle administration.

Total cost $870. Data entry, report preparation and tax return takes about half a day per year. Keeping up to date on compliance and administration changes requires a bit of general reading that I would do anyway as a trustee. 

I would have thought that accounting firms who can buy software for a few dollars per fund, have in-house auditing or at least buying power with a third party auditor and have access to electronic  transfer of transactions would have the cost base to make DIY look decidedly unattractive from a cost perspective – but unfortunately that’s not so. 

I don’t want to disparage people like V who do a fair days work for a fair days pay but the industry needs an overhaul if it is to represent value to the customer.

If the DIY path is not an option for you here’s a pretty good comparison table of administration providers. Scroll down for the annual admin prices. Looks like it's worth shopping around, so long as you can tell dodgy from good.

http://www.thesmsfreview.com.au/comparison-table-smsf.html


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## Bill M

Miss Hale said:


> We used to pay the same amount for our SMSF, it sounds to me like the standard accountant's fee for this work.  One of the reasons we got rid of our SMSF.




These fees are one of the reasons I have never started a SMSF. Did you really get out of it? I think 3K for 200K account is way over the top.

I think I prefer my industry fund, sure I have a little less control but I save thousands on fees. Here is what I paid in for a 100K (stress free) account last financial year.


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## craft

Bill M said:


> These fees are one of the reasons I have never started a SMSF. Did you really get out of it? I think 3K for 200K account is way over the top.
> 
> I think I prefer my industry fund, sure I have a little less control but I save thousands on fees. Here is what I paid in for a 100K (stress free) account last financial year.




Bill, 

Thats the lowest fees I have seen for a fund - are/were you a postie by any chance?


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## Bill M

craft said:


> Bill,
> 
> Thats the lowest fees I have seen for a fund - are/were you a postie by any chance?




Ha ha ha, how did you guess that? I was many years ago. The fund is First State Super and I had it in fixed interest which has a low MER.

PS: They just brought in some new fees due to new government super rules. Now my fees for a 100K account 50/50 in Australian fixed interest and International Fixed interest is $337, all in, all audited and nothing to do.


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## craft

Bill M said:


> Ha ha ha, how did you guess that? I was many years ago. The fund is First State Super and I had it in fixed interest which has a low MER.
> 
> PS: They just brought in some new fees due to new government super rules. Now my fees for a 100K account 50/50 in Australian fixed interest and International Fixed interest is $337, all in, all audited and nothing to do.




Bill

Big tick on the low fees – they are important over the long run.

The postie thing – guessed right but for the wrong reason – Aus post have the lowest industry super fees by a country mile (subsidised). 

Didn’t twig that you fees were so low because of the investment option you had selected.

Cheers


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## TikoMike

If you want cheap fees, try and look for an accounting firm that outsource processing for SMSF clients to India. A few accounting firms are doing that these days to save on costs.

The lower you pay the more the firm is likely to cut corners like the above example. When it comes time for an ATO audit, the money you saved in fees won't be money saved anymore.


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## Julia

Ves said:


> Screw this whole debate.  Now I feel angry.  Reminds me of Monday morning not the weekend.



There, there, Ves.  No need to feel angry.  No one is blaming you for anything.  Just take it easy.



Bill M said:


> These fees are one of the reasons I have never started a SMSF. Did you really get out of it? I think 3K for 200K account is way over the top.



And there we have an essential point.  I wouldn't be having a SMSF if it was only going to be $200K.
I pay a maximum of $2000, audit included, for a fund many times that size, so the fee is a tiny percentage and well worth it for the personal contact throughout the year if i have any questions, this all being included.  Such is not the case with many accountants, especially the larger firms who - like lawyers - will bill you for every phone call.



> I think I prefer my industry fund, sure I have a little less control but I save thousands on fees. Here is what I paid in for a 100K (stress free) account last financial year.



That's OK for $100K.  But if you have a larger amount you are surely going to want hands on full control.



craft said:


> Didn’t twig that you fees were so low because of the investment option you had selected.
> Cheers



Well, craft, if there are no share transactions to be processed and just a couple of bank accounts earning interest of course you'd expect the fee to be lower, wouldn't you?
In the last few years while my fund has been in cash, the tax return and audit fee has been considerably reduced.


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## SMSFguy

(Maiden post, I've come from the whirlpool/somersoft forum and there was another chap complaining about the same thing).

Yeah my professional opinion is $3k seems pretty excessive for a $200K. 
I'm a SMSF Accountant so I know the tricks of the trade. The accountant is not using a "blended" rate (book keeping rate<accounting rate), its quite admin/data-punching intensive so full blown accounting rate shouldn't be used. So really on a $200K you should be looking at a $1K (slightly above or below depending on activity). As a trustee try to target <1% fees over your fund, thats just the old rule of thumb to gauge your accounting fees. (Similar to 4 cents in the dollar with risk insurance premiums).

One of the good things about accounting firms/sole practitioners using BGL Simple Fund is they will release the data-file if you end the relationship, so your new accountant doesn't have to do any unnecessary setup work. So forum members should really be asking for the data-file once they have had their accounts done, its your property in my view.

We meet up with a group of SMSF accountants/auditors in Perth (I use to manage 250 funds for a CA firm), now only 90 funds (self-employed). One of the group members said they got a client with 3,000+ share trades via an Etrade account and knocked out the fund in 2 hrs, using a data-feed (unfortunately for him he is an employee so it wasn't his client) but you wouldn't believe how much they charged the fund. Here it is.... $14,000 for the 2012 FY, and $16,000 (more trades that year) for the 2011FY not inc audit, which was probably $1K+.

Made me feel sick because I am hammering these funds out for a living but are charging reasonable fixed fees negotiated upfront in order to keep clients happy. So yeah make sure you know what the terms of service are upfront (and what software they use) When you are dealing with Accountants, beware! they are starting to charge like lawyers! (charging for email/phone/meeting/simple admin).


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## Julia

I can't see how you can logically charge a % of capital invested.  Say, if a fund was worth $2M, but for the entire fy it just sat in a term deposit, how on earth could you justify anything other than a very small fee, given the minimal amount of work involved.

On the other hand, someone could have as little as $200K and be doing several trades a day.


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## SMSFguy

Julia said:


> I can't see how you can logically charge a % of capital invested.  Say, if a fund was worth $2M, but for the entire fy it just sat in a term deposit, how on earth could you justify anything other than a very small fee, given the minimal amount of work involved.
> 
> On the other hand, someone could have as little as $200K and be doing several trades a day.




You are right about % based fees. Asset based fees for financial services are banned, I personally wish this was enforced on say other sectors like Mortgage trails and Real Estate Agent commissions.

If you had say only term deposits and portfolio of shares it should cost sub <$1K.
So you will then spend money on a quality audit. I actually don't understand the "$250" audit ads I see in the subscriptions in magazine/classified, because as a practitioners I want to know that the auditor I use is well trained and keeping up with the latest standards and legislation. I feel sorry for auditors, its like a life of checking homework.

I have discussed fees with our group of accountants and realistically the lowest fee is about $770 and that normally only occurs if you are just rolling into a super fund for the year and or just on a buy and hold.  Someone mentioned their client had like $2M in only term deposits compound 6 months (5 yr term). It was previously a $3K fee (from the old accountant) but the new fee was only (and its because these no real activity) $770. Most clients should be hovering at the $1K (and would slightly be higher on a more busier year).


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## Centaur

SMSFguy said:


> You are right about % based fees. Asset based fees for financial services are banned, I personally wish this was enforced on say other sectors like Mortgage trails and Real Estate Agent commissions.
> 
> If you had say only term deposits and portfolio of shares it should cost sub <$1K.
> So you will then spend money on a quality audit. I actually don't understand the "$250" audit ads I see in the subscriptions in magazine/classified, because as a practitioners I want to know that the auditor I use is well trained and keeping up with the latest standards and legislation. I feel sorry for auditors, its like a life of checking homework.
> 
> I have discussed fees with our group of accountants and realistically the lowest fee is about $770 and that normally only occurs if you are just rolling into a super fund for the year and or just on a buy and hold.  Someone mentioned their client had like $2M in only term deposits compound 6 months (5 yr term). It was previously a $3K fee (from the old accountant) but the new fee was only (and its because these no real activity) $770. Most clients should be hovering at the $1K (and would slightly be higher on a more busier year).




SMSFGuy
I'm interested to know why you would want mortgage trails and real estate commissions changed/banned,particularly mortgages as the consumer doesn't pay.
If you had fixed commission (one size fits all) then we would have no real estate agents selling in the low volume high value suburbs.

Centaur


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## SMSFguy

Centaur said:


> SMSFGuy
> I'm interested to know why you would want mortgage trails and real estate commissions changed/banned, particularly mortgages as the consumer doesn't pay.
> If you had fixed commission (one size fits all) then we would have no real estate agents selling in the low volume high value suburbs.
> 
> Centaur




Hi Centaur, 

I was just having a bit of rant. But to flesh it out, I just think we are getting over regulated on the (Investment) financial services side of things (I'm not an investment advisor, I'm in the compliance side on SMSF so I get mauled by the same regulation;  I have to watchout what I say - keep things general etc when talking to clients. Whereas real-estate agents are advising on purchasing property through SMSF's - without any ramifications from ASIC or ATO when they are also giving tax-advice. So there are no statements of Advice nor ATO auditors regulating them and lecturing them on fiduciary duties and ethics.
So our SMSF industry is now Fee-for-Service, on the Investment side they now have to provide a "Fee Disclosure Statement" which lists what fees you have paid for the year, which services you are entitled too - and what you have not used.  And clients must opt-in to services once a yearly. It's a nightmare for those in the industry. Come 1st July 2013 everyone's mail boxes are going to inundated with these new documents.

Anyway mortgages / real estate agents are % based and have been since I remember. It's crazy the median land price here in Perth must be $700,000+ in the new estates in around the metro-area. So real-estate agents here are giving SMSF advice and Tax Advice with no ramifications. The most common issue is trustees with offer and acceptance forms not being completed correctly and therefore causing double stamp duty issues to the SMSF.

I had a meeting with a client earlier this month. They were just about to sign an offer and acceptance form before our consultation. They had had several meetings with a real estate agent, the funny thing he was advising them to purchase using their SMSF via a loan - failed to mention anything about requiring a Bare Trust arrangement or how to complete the offer and acceptance. (They were informed by the agent it was ok to just put the fund name down when its a loan, which is not correct) *sigh*.

This article just popped up:
http://www.news.com.au/realestate/n...-your-home-loans/story-fncq3gat-1226606499457

With loans it's basically the predatory lending and crazy gearing strategies that have caused the conflict of interest.  It's a flawed example but STORM financial was convincing client's to gear their homes to buy shares and the group gets a trail from the loans, advice, and investments fees. (bad example because the Storm guys were already Fee-for-Service).

(Here's another bad example - it's fully licensed, and a very well oiled machine- but just seems wrong and should have a cap)
There is a property group here in Perth. They set up client's to buy properties from the developer in their SMSF's.
The property expert - is a mortgage broker/financial advisor/real estate agent
They get Fees for the SMSF Set up   
They get Fees for the Bare Trust 
They get Fees for the Loan Establishment and trails
They get Fees from the Developer as a commission
They get Fees from the Statement of Advice
They get Fees from the Life Insurance / General Insurance Cover.
This basically works out to be $80K per client. per property transaction.

It just seems like something has got to give.

I don't think a one size fits all, but a upper cap - and mandatory training and licencing for other disciplines as well.
This will stop these crazy business models from popping up. 

What are your thoughts? (almost seems like a thread hi-jack)


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## SMSFguy

​
http://www.smsfessentials.com.au/news/2013/independent-mortgage-plan-craig-morgan-smsf-fraud

Another article popped up in my email box this morning, which might give you an idea what SMSF trustees are facing at the moment; beware of predatory behaviour.


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## Julia

If you don't have the capacity to recognise scams, you shouldn't be a SMSF trustee in the first place.


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## Intrinsic Value

It is a rip off but it could be worse as many accountants just seem to make the bill up out of anything they feel like charging.

My accountant told me a friend of his who uses another accounting firm got charged 10k for his super return and he reckons the main reason is that he has about 3m in the account so they just charge more based on the amount they think he can afford.

I paid my fee this week and it was 720 dollars and I have a lot more money in my super and quite a few share transactions.

I downloaded my bank account details from commsec and sent the spread sheet across to him. He got all the other info off commsec and plugged it into MYOB and sent me the paper work to sign.

It would have been a few hours work for him. 

You need to shop around and find an accountant who is reasonable.


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## TikoMike

Intrinsic Value said:


> It is a rip off but it could be worse as many accountants just seem to make the bill up out of anything they feel like charging.
> 
> My accountant told me a friend of his who uses another accounting firm got charged 10k for his super return and he reckons the main reason is that he has about 3m in the account so they just charge more based on the amount they think he can afford.
> 
> I paid my fee this week and it was 720 dollars and I have a lot more money in my super and quite a few share transactions.
> 
> I downloaded my bank account details from commsec and sent the spread sheet across to him. He got all the other info off commsec and plugged it into MYOB and sent me the paper work to sign.
> 
> It would have been a few hours work for him.
> 
> You need to shop around and find an accountant who is reasonable.




$720 is an extremely low fee for a fund worth more than $3mill, unless your only investment is a few term deposits here and there with large maturity dates. I would be looking to see if your accountant is cutting corners to spend less time on your super fund, plus the fact that he prepares your accounts on MYOB would not sit well with me. I wouldn't be to confident if the ATO one day sent written notice that your fund is to be audited (there could be a chance seeing as it is worth more than $3mill).

You people have to understand that most accountants charge on the time they spend to complete your work. Therefore, if you have a lot of transactions in your super account and *diversified investments* or lots of trades, they will be spending a lot more time to complete your work. Of course some things may not be your fault such as a company(s) the fund is invested in goes through complex mergers/demergers in which the accountant has to figure out the tax implications thereof (this is starting to get more automated in the future, however). However, it is still time that they have to spend to do their job. Of course the more information you can provide your accountant so no queries come back to you the lower he will charge. It's up to you how well you respond to your accountant and how much information you provide in order to reduce that time.

Honestly, for you people who complain about fees and such, if you're such an expert on what accountants should charge then go do the work yourself and lodge it as Trustee of the fund. See if the ATO likes what you do. 

Like I said before if you really want low fees for the compliance side of your fund then there are plenty of accountants out there that cut corners with a dodgy auditor they know or even outsourcing part of your job for Indians to do. I'm not judging you for wanting low fees, everyone likes a bargain. However, I am just giving you warning of what could happen if you pursue that low fee.


----------



## Julia

Intrinsic Value said:


> I paid my fee this week and it was 720 dollars and I have a lot more money in my super and quite a few share transactions.



$720 and you have more than $3M including a number of share transactions?
What about the audit?


----------



## Intrinsic Value

Julia said:


> $720 and you have more than $3M including a number of share transactions?
> What about the audit?




Sorry I think I was  not clear in my post.

I meant I had lot more than the OP in my super ie more than 200k not 3 million. I wish I did.

The 3 million was just an example of what my accountant considers as the rampant over charging in the industry.

My guy is extremely cheap but having said that the OP really shouldn't be paying more than 1500. 3k is really expensive for what he got done.


----------



## Julia

Intrinsic Value said:


> Sorry I think I was  not clear in my post.
> 
> I meant I had lot more than the OP in my super ie more than 200k not 3 million. I wish I did.
> 
> The 3 million was just an example of what my accountant considers as the rampant over charging in the industry.
> 
> My guy is extremely cheap but having said that the OP really shouldn't be paying more than 1500. 3k is really expensive for what he got done.



You haven't answered the question as to whether the audit cost was included?
Does your accountant also do the audit or does he send it out to be done independently?


----------



## Intrinsic Value

Julia said:


> You haven't answered the question as to whether the audit cost was included?
> Does your accountant also do the audit or does he send it out to be done independently?




Yes audit is included. I reconcile everything he does anyway. I am a qualified accountant myself but haven't been practising for many years so I have a pretty good idea of competency. 

3k is way over the odds whichever way you look at it. If he shops around I am sure he can get something less than half the cost.


----------



## TikoMike

Intrinsic Value said:


> Yes audit is included. I reconcile everything he does anyway. I am a qualified accountant myself but haven't been practising for many years so I have a pretty good idea of competency.
> 
> 3k is way over the odds whichever way you look at it. If he shops around I am sure he can get something less than half the cost.




I highly doubt you have practised at all because of your previous comments. It's not the value of the fund that determines the cost. Perhaps the 3k is justified from the amount of work that is required, we wouldn't really know until we actually do the work.

Also if you're a qualified accountant why are you getting another accountant to do your work? Seeing as you're so adamant on fees.


----------



## Intrinsic Value

TikoMike said:


> I highly doubt you have practised at all because of your previous comments. It's not the value of the fund that determines the cost. Perhaps the 3k is justified from the amount of work that is required, we wouldn't really know until we actually do the work.
> 
> Also if you're a qualified accountant why are you getting another accountant to do your work? Seeing as you're so adamant on fees.




Don't try and justify your excessive fees to me because it wont wash.

I am not adamant on fees but I am aware of the amount of work required to do a SMSF return and 3k is over the top for a fund with 200k and a few share transactions.

It is a few hours work that is about it.

Please read the posts by the guy who is a SMSF accountant and what he says. 1k or a bit more is about right.

I am happy with the work my accountant does otherwise I wouldn't use him and yes I could do it myself but he handles my company tax, personal tax and SMSF all at very reasonable rates because I am busy enough as it is without dealing with all of that.


----------



## TikoMike

Intrinsic Value said:


> Don't try and justify your excessive fees to me because it wont wash.
> 
> I am not adamant on fees but I am aware of the amount of work required to do a SMSF return and 3k is over the top for a fund with 200k and a few share transactions.
> 
> It is a few hours work that is about it.
> 
> Please read the posts by the guy who is a SMSF accountant and what he says. 1k or a bit more is about right.
> 
> I am happy with the work my accountant does otherwise I wouldn't use him and yes I could do it myself but he handles my company tax, personal tax and SMSF all at very reasonable rates because I am busy enough as it is without dealing with all of that.




They are only excessive to the ignorant, plus they are not "my" fees as I don't own an accounting practice. I'm an employee in an accounting firm and I'm just telling you how it is. You see, every employee in the accounting firm you send your work to has something called a charge out rate per hour. Accountants don't go to uni for 3 years + do another 3 years of professional studies (CA or CPA) to earn the same income as a store clerk. They are going to have very high charge out rates. Even the receptionist or admin people have a charge out rate per hour and any of those people who touch your job will put their time towards it. In a normal, high-service accounting firm it would have to go through various processes in order to give quality assurance. This is important as SMSFs are much more heavily regulated than other areas (eg business services). You would understand this if you actually worked in an accounting firm in the first place. Some of you fee "experts" really baffle me with your assumptions.

Also I did read Ves's posts (I am also an SMSF accountant) and it was very similar to what I was saying. He also got frustrated trying to explain the fees to people like you. You think people can charge such low fees without cutting corners? Do some research and you will find a lot of accountants are now outsourcing SMSF work to India without the client knowing. The question is: is that something you don't mind?

I just hope your fund goes for an ATO audit one day, you may think it all reconciles in your eyes but it would be interesting to see if you or your accountant's SMSF knowledge on the law is up to date. In my eyes $720 (including audit) is an extremely low fee and I would not be surprised if your accountant and auditor is cutting corners.


----------



## Intrinsic Value

TikoMike said:


> They are only excessive to the ignorant, plus they are not "my" fees as I don't own an accounting practice. I'm an employee in an accounting firm and I'm just telling you how it is. You see, every employee in the accounting firm you send your work to has something called a charge out rate per hour. Accountants don't go to uni for 3 years + do another 3 years of professional studies (CA or CPA) to earn the same income as a store clerk. They are going to have very high charge out rates. Even the receptionist or admin people have a charge out rate per hour and any of those people who touch your job will put their time towards it. In a normal, high-service accounting firm it would have to go through various processes in order to give quality assurance. This is important as SMSFs are much more heavily regulated than other areas (eg business services). You would understand this if you actually worked in an accounting firm in the first place. Some of you fee "experts" really baffle me with your assumptions.
> 
> Also I did read Ves's posts (I am also an SMSF accountant) and it was very similar to what I was saying. He also got frustrated trying to explain the fees to people like you. You think people can charge such low fees without cutting corners? Do some research and you will find a lot of accountants are now outsourcing SMSF work to India without the client knowing. The question is: is that something you don't mind?
> 
> I just hope your fund goes for an ATO audit one day, you may think it all reconciles in your eyes but it would be interesting to see if you or your accountant's SMSF knowledge on the law is up to date. In my eyes $720 (including audit) is an extremely low fee and I would not be surprised if your accountant and auditor is cutting corners.




Now I know why you charge so much. I avoid all big accounting firms like the plague because they charge like wounded bulls.

You see I worked for Deloittes as an auditor/accountant way back so I know exactly how it works.

I am in direct competition with Accenture these days which as you probably know is a rebranded version of Arthur Anderson that went belly up. They also use the same model as the big accounting firms in IT projects I bid on and stack them with juniors and charge them out at high rates while a bunch of fat cat partners cream off all the profit. 

 So please don't try and sell me your rubbish because I have been on the inside and know exactly how it works.


----------



## Julia

TikoMike said:


> You see, every employee in the accounting firm you send your work to has something called a charge out rate per hour. Accountants don't go to uni for 3 years + do another 3 years of professional studies (CA or CPA) to earn the same income as a store clerk. They are going to have very high charge out rates. Even the receptionist or admin people have a charge out rate per hour and any of those people who touch your job will put their time towards it.



Perhaps a reason to seek out a small independent accountant who isn't paying expensive rent and other overheads like an army of receptionists and clerks.  A quote I had from one of these big firms with the glossy advertising was $5000 for what I currently pay $1500 - $2000.


----------



## Ves

Julia said:


> Perhaps a reason to seek out a small independent accountant who isn't paying expensive rent and other overheads like an army of receptionists and clerks.  A quote I had from one of these big firms with the glossy advertising was $5000 for what I currently pay $1500 - $2000.



That's a sensible approach for many.  The boutique firms / or large firms charging the higher rates are specialists in the field - they have extensive knowledge, training, expertise and reputation in handling superannuation work. They know how to advise on and deal with the regulatory curve-balls, "out there" proposals etc. that a lot of simple funds may not ever deal with.  The paperwork in these places will be thorough, above industry standard and there is unlikely to be much corner cutting. As I said they have a reputation and you are paying for it.  

Smaller operators have more general superannuation knowledge.  They will glance over compliance issues.  For something simple to you, for instance starting a pension, they may or may not know if the trust deed allows for a transition to retirement income stream for instance...  will the ATO ever find this out?  Probably not, but you may want piece of mind if they ever do.  What if a member dies?  Will they know how to handle it?  Maybe?  Probably not.

I had a client come in just last week.  He came to us with a problem created after going to a small firm, because he didn't want to pay more than $1,000-$1,500 for his work.  All good for many years.

He decided in the last year he wanted to put a corporate trustee in his Fund.  Talks to his now ex-grass roots accountant.  They decided together (don't ask me how) that you need to open an entirely new Fund and in-specie transfer all of the Fund assets into the new corporate trustee as trustee for the new fund.

Of course by the time my firm sees this, the new Fund is operating and the transfers have done.  He didn't think he had to pay any tax on the disposal of the assets in the old fund.  After looking at it, we told him to expect a $20,000.00 tax bill from the ATO for this year's tax return. Not including the fees paid for the transfer paperwork and the new deeds / consitituion.  all unavoidable.  And certainly not refundable after the fact.

He was happy to have saved money on fees for many years.  But now he's giving them all back to the ATO for his and his previous accountants mistake.

I'm sure most of you won't ever experience this - but as with anything, sometimes it pays to look for quality as well as value.  It's possible.

Put it this way until you have a problem; I'm someone who is over-paid, not respected and a necessary evil you have to see once a year.


----------



## McLovin

Ves said:


> Put it this way until you have a problem; I'm someone who is over-paid, not respected and a necessary evil you have to see once a year.




I like my accountant.

I got the bill for our family SMSF it was around $3,300. Most of the funds in it are my parents, I don't put much in super. Considering the size of the fund, I think it's a fair price to pay.

I can certainly understand someone with ~$500k in an SMSF being a bit PO about paying $3,300 in admin. I guess you could probably lower the compliance and accounting costs if they stopped changing super laws every year.


----------



## Intrinsic Value

The big accounting companies are okay if you are a big commercial company as they are primarily designed to service the bigger end of the market.

They have high overheads and a brutal pricing stucture designed to keep partners in an opulent life style that they feel they deserve after they have flogged their guts out for 20 years or so. They are not much different in
the way they structure their business model to the big law firms.

There are plenty of suburban accountants out there with much lower overheards and a good deal of expertise that will do everything much cheaper.

Also dont believe the scare mongering by members of these high charging big firms about how they have the expertise and knowledge and know how etc etc because as history as proven they have also been caught out not doing due dilegence when signing off accounts and even fraud. The most spectacular of which was Arthur Anderson and Enron which effectively led to AA being dismantled although Phoenix like it has risen and rebranded itself as Accenture. I could write a book on Accentures dubious billing practices and modus operandi but suffice to say that are the price gougers extraordinaire.


----------



## TikoMike

Intrinsic Value said:


> Now I know why you charge so much. I avoid all big accounting firms like the plague because they charge like wounded bulls.
> 
> You see I worked for Deloittes as an auditor/accountant way back so I know exactly how it works.
> 
> I am in direct competition with Accenture these days which as you probably know is a rebranded version of Arthur Anderson that went belly up. They also use the same model as the big accounting firms in IT projects I bid on and stack them with juniors and charge them out at high rates while a bunch of fat cat partners cream off all the profit.
> 
> So please don't try and sell me your rubbish because I have been on the inside and know exactly how it works.




"Now I know why you charge so much" and "You see I worked for Deloittes" is such a contradiction. To be honest the way you talk I would say that you are full of rubbish yourself when you say things like "Your super fund is around 200k you should only be charged at most 1.5k". Are ****ing serious? I mean seriously no just no. That 200k fund could have so much work and you can't just simply assume without doing the work yourself. 

I'm not trying to "sell" you rubbish or trying to say the fees are fair or not fair, I'm just telling you that's the way it is. Administration fees are always listed as a con when weighing up the decision to start an SMSF or not. However, the way I feel is that you just cannot charge low fees without cutting corners. I used to work for a firm (which I left due to ethical reasons) who sent their client's SMSF to an auditor who did not care to see source documents - a general ledger (ie a report produced by the accountant and not sourced from a third party) would suffice as reconciliation to amounts in the financials. That auditor did that so he could charge for a large quantity of funds. The audit remained the same for every client. You think that's the type of due care anyone would want for their SMSF? You pay for what you get.

I really hope your fund gets audited by the ATO because the way you talk and "reason" annoys the **** out of me and instead of caring I would laugh at you. Also there will be a good chance with that audit fee being so low as low audit fees is one of the red flags the ATO looks out for.


----------



## Intrinsic Value

TikoMike said:


> "Now I know why you charge so much" and "You see I worked for Deloittes" is such a contradiction. To be honest the way you talk I would say that you are full of rubbish yourself when you say things like "Your super fund is around 200k you should only be charged at most 1.5k". Are ****ing serious? I mean seriously no just no. That 200k fund could have so much work and you can't just simply assume without doing the work yourself.
> 
> I'm not trying to "sell" you rubbish or trying to say the fees are fair or not fair, I'm just telling you that's the way it is. Administration fees are always listed as a con when weighing up the decision to start an SMSF or not. However, the way I feel is that you just cannot charge low fees without cutting corners. I used to work for a firm (which I left due to ethical reasons) who sent their client's SMSF to an auditor who did not care to see source documents - a general ledger (ie a report produced by the accountant and not sourced from a third party) would suffice as reconciliation to amounts in the financials. That auditor did that so he could charge for a large quantity of funds. The audit remained the same for every client. You think that's the type of due care anyone would want for their SMSF? You pay for what you get.
> 
> I really hope your fund gets audited by the ATO because the way you talk and "reason" annoys the **** out of me and instead of caring I would laugh at you. Also there will be a good chance with that audit fee being so low as low audit fees is one of the red flags the ATO looks out for.




I wouldn't want you doing any work for  me because you lack basic reading skills.

The OP stated that he had very few transactions and his fund was around 200k and he was charged 3k. Now I and a few other posters here believe that he can do much better than that like at least half the cost if he shops around.

Simple as that.


----------



## TikoMike

Intrinsic Value said:


> I wouldn't want you doing any work for  me because you lack basic reading skills.
> 
> The OP stated that he had very few transactions and his fund was around 200k and he was charged 3k. Now I and a few other posters here believe that he can do much better than that like at least half the cost if he shops around.
> 
> Simple as that.




"*couple of dozen* share trades" is more than a few. Share trades are not always so vanilla from a tax POV. There could also be selection bias as is the case with most people. If he was really able to judge how the work is to be done and how much time to spend on it then he should have done it himself.

I'm done with you. Good luck with your intrinsic valuations.


----------



## RogueTrader273

Ok I eventually got a reply from my accountant when I asked for a fee schedule:

*" Normally our cost would be between $1600 to $2200.

The audit factor by the way is $500 plus GST. In your case there was quite a lot of share trading (ie. Some 20 trades).

This requires a fair amount of work to cover off on these. Additionally, following the ATO audit the ATO instructed us to do additional interest calculations.  

Our actual time spent on the job (exclude audit and GST) was 14 hours for a cost of $2310. "*


The audit referred to was done a few months ago by the ATO, for which my accountant charged me about $1500.  The ATO found no cause for any penalties.  

I fail to see how doing twenty share trades (all data supplied neatly on a spreadsheet to the agent, including a printout from my broker) can take fourteen hours to process and cost me nearly three thousand dollars (including audit)!  Maybe someone here can shed some light?  Personally I still agree with those who say I'm being ripped off.


----------



## Julia

RogueTrader273 said:


> The audit factor by the way is $500 plus GST. In your case there was quite a lot of share trading (ie. Some 20 trades).



I can't imagine too many accountants would regard 20 trades as "quite a lot".



> This requires a fair amount of work to cover off on these. Additionally, following the ATO audit the ATO instructed us to do additional interest calculations.



You didn't originally explain that there was an additional ATO audit requiring more work on the part of the accountant.  I'm a bit confused.  Is the charge for this, as below, of 'about $1500' separate from the charge for 'additional interest calculations' ?



> I fail to see how doing twenty share trades (all data supplied neatly on a spreadsheet to the agent, including a printout from my broker) can take fourteen hours to process and cost me nearly three thousand dollars (including audit)!  Maybe someone here can shed some light?  Personally I still agree with those who say I'm being ripped off.



Are you suggesting that all that's involved in preparing a SMSF tax return and audit is the processing of 20 share trades?


----------



## RogueTrader273

Julia said:


> I can't imagine too many accountants would regard 20 trades as "quite a lot".



Very true - isn't this just a case of trying to make the job sound much more arduous than it is?



Julia said:


> You didn't originally explain that there was an additional ATO audit requiring more work on the part of the accountant.  I'm a bit confused.  Is the charge for this, as below, of 'about $1500' separate from the charge for 'additional interest calculations' ?




No the ATO audit which cost $1500 was for the previous financial year.  To charge me an additional $500 plus GST for a few alleged interest calc's sounds greatly excessive.


Julia said:


> Are you suggesting that all that's involved in preparing a SMSF tax return and audit is the processing of 20 share trades?




No I phrased that poorly - better would be "I fail to see how am SMSF which only did twenty share trades and changed bank accounts can take fourteen hours to process."


----------



## Ves

I was actually going to post this originally, but I gave you the benefit of the doubt.  It sounds like you have compliance issues  (ie. you did something wrong the ATO is on your case) and your accountant helped you get out of trouble.   

I've seen this time and time again, people screw up and expect to pay nothing for specialist advice to fix the problem and want to pay next to nothing.

I apologise if I'm wrong - but those kinds of people really annoy me.


----------



## TikoMike

RogueTrader273 said:


> Personally I still agree with those who say I'm being ripped off.




Of course you agree, you've got selection bias plus the close minded ignorance might be an added factor.


----------



## RogueTrader273

No compliance issues - apparently a random audit which I passed with no problems, apart from another fee to my accountant.

More intriguing is the auditor's fee - $550, which sounds quite fair.  However I contacted the auditor to confirm his fee, which initially he was reluctant to disclose.  When I mentioned $550 he sounded rather incensed and immediately insisted his fee was only $275!   Since this is the third time I have lodged returns with this accountant, is there any good reason why I shouldn't subtract $275 x 3 from the current bill?  If this isn't evidence of cheating the client I don't know what is!  (And yes the accountant confirmed $550 via email.)


----------



## 8Yworry457

for the 2012/2013 FY I have decided to do the entire process  myself.
The cost of accounting and audit for my $1.5M fund have risen to $5K.
The excuse they give me is that because it is to be audited they have to create an auditable trail for every single entry even inwards interest payments each month and bank fees. I provide the SimpleFund file currently so feel I am being ripped off.
What I really need is someone who can be paid to run their eye over the treatment of entries at year end to make sure they meet tax requirements.
The finding an auditor should be easy.
Any suggestions welcome.
I live in Melbourne.


----------



## The Muffin Man

As a qualified accountant (CPA), it's interesting to read discussion of accounting fees. 

I think this misconception that the monetary size of the fund directly correlates to the fee charged needs to be addressed. A fund with 25 shares trades and a $200k balance will take longer to process than a fund that has it's balance of $5m sitting in a term deposit for the year. The more trading you do, or the more investments you hold (even of the same asset class), the more processing required and the more work papers needed to back up this processing. You then need work papers backing up all balances as at 30/06.

From my experience, I'd say an SMSF that has 20+ share transactions is a higher than normal number. I think the fact that this a a stock market forum needs to be taken into consideration, so you're going to be surrounded by people that trade stocks who will think that 20+ buy/sell transactions per annum is low. In reality, most people with SMSF's don't effectively trade within their SMSF. They buy and hold their stocks, have their funds allocated to managed investments, term deposits, & real estate. Of the funds we complete, I would say maybe 5% would have over 20 share transactions in a year.


----------



## The Muffin Man

Intrinsic Value said:


> Don't try and justify your excessive fees to me because it wont wash.
> 
> I am not adamant on fees but I am aware of the amount of work required to do a SMSF return and 3k is over the top for a fund with 200k and a few share transactions.
> 
> *It is a few hours work that is about it.*
> 
> Please read the posts by the guy who is a SMSF accountant and what he says. 1k or a bit more is about right.
> 
> I am happy with the work my accountant does otherwise I wouldn't use him and yes I could do it myself but he handles my company tax, personal tax and SMSF all at very reasonable rates because I am busy enough as it is without dealing with all of that.




What would you define 'a few' as?

How long ago exactly did you work as an accountant and did you work on SMSF's?


----------



## Julia

The Muffin Man said:


> I think this misconception that the monetary size of the fund directly correlates to the fee charged needs to be addressed.



I think, if anything, this suggestion has been argued against on this forum.  



> A fund with 25 shares trades and a $200k balance will take longer to process than a fund that has it's balance of $5m sitting in a term deposit for the year.



Sure.  Wouldn't have thought this needed to be explained.



> From my experience, I'd say an SMSF that has 20+ share transactions is a higher than normal number. I think the fact that this a a stock market forum needs to be taken into consideration, so you're going to be surrounded by people that trade stocks who will think that 20+ buy/sell transactions per annum is low. In reality, most people with SMSF's don't effectively trade within their SMSF. They buy and hold their stocks, have their funds allocated to managed investments, term deposits, & real estate. Of the funds we complete, I would say maybe 5% would have over 20 share transactions in a year.



Thanks for that rather surprising information.

Why then do you think so many people are opting for SMSFs if they don't want to be involved in active management?


----------



## Ves

Hey Julia,

Do you think the 20+ share transactions should be counted as income or on capital account?


----------



## Intrinsic Value

The Muffin Man said:


> What would you define 'a few' as?
> 
> How long ago exactly did you work as an accountant and did you work on SMSF's?




Here we go another accountant trying to justify excessive SMSF fees.

I know exactly how long my SMSF took to do because it is itemised on my invoice.

The best advice I can give people is to shop around when trying to find an accountant.

Don't use the big companies as their overheads mean that you will generally pay more for their services.

Pick a suburban accountant and ask for a rough estimate first.


----------



## Ves

IV, do you know what the break-even cost per hour is for the average suburban firm to open its doors? What is a fair profit margin for the owner's business risk on top of this?


----------



## Intrinsic Value

Ves said:


> IV, do you know what the break-even cost per hour is for the average suburban firm to open its doors? What is a fair profit margin for the owner's business risk on top of this?




I don't know and I don't care.

What I do know is that the OP could have got the same job done for half the  money if he shopped around.

That is all I need to know.


----------



## Ves

Intrinsic Value said:


> I don't know and I don't care.
> 
> What I do know is that the OP could have got the same job done for half the  money if he shopped around.
> 
> That is all I need to know.



Why do you insist on denigrating the accounting profession but avoid having an honest conversation about it's fee structure?


----------



## Intrinsic Value

Ves said:


> Why do you insist on denigrating the accounting profession but avoid having an honest conversation about it's fee structure?




Nobody is denigrating anyone here.

This discussion is about SMSF fees and the OP and others like myself feel the fees he was charged were excessive for the amount of work done simple as that.

Like any service the consumer should shop around and find the best deal because it seems that there are plenty of accounting firms who charge whatever they like for SMSF compliance and then try to justify it by saying they  have high overheads.

No one cares about accounting practice overheads except the accountants themselves. When you go shopping do you think about the price in terms of the overhead costs of the company you are buying your goods from? I think not. You look for value for money and quality of product and then weigh up how much you are willing to pay.


----------



## TikoMike

Intrinsic Value said:


> Nobody is denigrating anyone here.
> 
> This discussion is about SMSF fees and the OP and others like myself feel the fees he was charged were excessive for the amount of work done simple as that.
> 
> Like any service the consumer should shop around and find the best deal because it seems that there are plenty of accounting firms who charge whatever they like for SMSF compliance and then try to justify it by saying they  have high overheads.
> 
> No one cares about accounting practice overheads except the accountants themselves. When you go shopping do you think about the price in terms of the overhead costs of the company you are buying your goods from? I think not. You look for value for money and quality of product and then weigh up how much you are willing to pay.




Couldn't help but reply to the stupidity of the above quoted post. I think it's time I hit the ignore button and move on.

Buying a bottle of milk is different from accounting work. It's like talking to a brick wall. How many times do we have to repeat cutting corners to you?


----------



## Ves

Intrinsic Value said:


> Nobody is denigrating anyone here.
> 
> This discussion is about SMSF fees and the OP and others like myself feel the fees he was charged were excessive for the amount of work done simple as that.
> 
> Like any service the consumer should shop around and find the best deal because it seems that there are plenty of accounting firms who charge whatever they like for SMSF compliance and then try to justify it by saying they  have high overheads.
> 
> No one cares about accounting practice overheads except the accountants themselves. When you go shopping do you think about the price in terms of the overhead costs of the company you are buying your goods from? I think not. You look for value for money and quality of product and then weigh up how much you are willing to pay.



Fair enough,   you don't want to have a conversation.    Catchya.


----------



## Intrinsic Value

TikoMike said:


> Couldn't help but reply to the stupidity of the above quoted post. I think it's time I hit the ignore button and move on.
> 
> Buying a bottle of milk is different from accounting work. It's like talking to a brick wall. How many times do we have to repeat cutting corners to you?




Keep saying it long enough and often enough and you will convince yourself that your fee structure is justifiable even thou others seem to be able to provide the same service at much lower rates.

Anyway why do you care as long as you have clients willing to pay your fees you are laughing.

Just don't expect me to buy your lines of high overheads and you went to uni for many years and are better than the rest blah blah blah


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## The Muffin Man

Julia said:


> I think, if anything, this suggestion has been argued against on this forum.
> 
> 
> Sure.  Wouldn't have thought this needed to be explained.
> 
> 
> Thanks for that rather surprising information.
> 
> Why then do you think so many people are opting for SMSFs if they don't want to be involved in active management?




Julia, reading through the thread it was clear that the person who first posted continually referred to the accounting fee being high relative to the value of the fund. Others have also stated that they believe the fee was high based on the value of the fund. My point is that the value of the fund is not the determining factor when an accountant charges their fees, it's the amount of processing work required to complete the task. This obviously does need to be explained because numerous people in this thread do not understand the concept.

In relation to SMSF's, why do you correlate trading shares with 'active management?' You don't need to have 20+ share trades in your SMSF annually to be actively managing your fund. Many opt to put commercial property linked to their businesses within their fund, rental properties, farmland, they like to select their own fixed investments, obscure shares (listed and unlisted), or set up blue chip type funds and hold long term. To me, this is all active management, it just doesn't involve churning through 10-20 shareholdings per year. The main benefit is obviously control, they get to select exactly what assets they want to hold within the fund (if it's within the SIS Act).


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## The Muffin Man

Intrinsic Value said:


> Here we go another accountant trying to justify excessive SMSF fees.
> 
> I know exactly how long my SMSF took to do because it is itemised on my invoice.
> 
> The best advice I can give people is to shop around when trying to find an accountant.
> 
> Don't use the big companies as their overheads mean that you will generally pay more for their services.
> 
> Pick a suburban accountant and ask for a rough estimate first.




Thanks for not bothering to answer my direct questions. :thankyou:


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## Intrinsic Value

The Muffin Man said:


> Julia, reading through the thread it was clear that the person who first posted continually referred to the accounting fee being high relative to the value of the fund. Others have also stated that they believe the fee was high based on the value of the fund. My point is that the value of the fund is not the determining factor when an accountant charges their fees, it's the amount of processing work required to complete the task. This obviously does need to be explained because numerous people in this thread do not understand the concept.
> 
> In relation to SMSF's, why do you correlate trading shares with 'active management?' You don't need to have 20+ share trades in your SMSF annually to be actively managing your fund. Many opt to put commercial property linked to their businesses within their fund, rental properties, farmland, they like to select their own fixed investments, obscure shares (listed and unlisted), or set up blue chip type funds and hold long term. To me, this is all active management, it just doesn't involve churning through 10-20 shareholdings per year. The main benefit is obviously control, they get to select exactly what assets they want to hold within the fund (if it's within the SIS Act).




You clearly have reading comprehension issues. Please read the quote from the OP below.

'My accountant has just prepared my tax return for my SMSF and mailed me a bill along with the tax papers to sign for a bit less than $3000 (includes audit). This seems an outrageous amount for an SMSF that has only switched funds of around $200k from one bank account to another and made a couple of dozen share trades'

A couple of dozen share trades is all the action he had on his account. This is what he is rightly complaining about but as Julia stated and I agree you need to shop around and get a quote as you are in an industry that is unregulated when it comes to fees.


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## 8Yworry457

Intrinsic Value said:


> You clearly have reading comprehension issues. Please read the quote from the OP below.
> 
> 'My accountant has just prepared my tax return for my SMSF and mailed me a bill along with the tax papers to sign for a bit less than $3000 (includes audit). This seems an outrageous amount for an SMSF that has only switched funds of around $200k from one bank account to another and made a couple of dozen share trades'
> 
> A couple of dozen share trades is all the action he had on his account. This is what he is rightly complaining about but as Julia stated and I agree you need to shop around and get a quote as you are in an industry that is unregulated when it comes to fees.




Is this thread losing focus?

Yes Accounting firms have high set up and running costs.
Yes if they spend a lot of time on numerous transaction and the fund is complex they will incur more charge out hours and the bill will be higher.
But the simple fact is that the Accountant's charge will be a cost irrespective of the return the fund achieves.
With low returns/profit the Accountants fees could easily be 10% plus of the surplus allocated  to beneficiaries.
So they, like Financial Planners (if used) will be paid no matter what.
The question may arise 'is an SMSF  worth it with all the costs?'

Also, my spies tell me that accounting firms have billing inflation techniques to ensure the hours rack up.
This is especially easy to do when the tax payer i.e. an SMSF is audited because they have to leave an audit trail and they say the auditor requires this work otherwise there is the big threat of the Auditor/ATO.

For me, this year is crunch year to sort out these costs.

Super has been a gravy train for so many people and Accountants naturally will recognize a business opportunity.


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## SMSFguy

8Yworry457 said:


> Is this thread losing focus?
> 
> Yes Accounting firms have high set up and running costs.
> Yes if they spend a lot of time on numerous transaction and the fund is complex they will incur more charge out hours and the bill will be higher.
> But the simple fact is that the Accountant's charge will be a cost irrespective of the return the fund achieves.
> With low returns/profit the Accountants fees could easily be 10% plus of the surplus allocated  to beneficiaries.
> So they, like Financial Planners (if used) will be paid no matter what.
> The question may arise 'is an SMSF  worth it with all the costs?'
> 
> Also, my spies tell me that accounting firms have billing inflation techniques to ensure the hours rack up.
> This is especially easy to do when the tax payer i.e. an SMSF is audited because they have to leave an audit trail and they say the auditor requires this work otherwise there is the big threat of the Auditor/ATO.
> 
> For me, this year is crunch year to sort out these costs.
> 
> Super has been a gravy train for so many people and Accountants naturally will recognize a business opportunity.




8Yworry457 
I would confirm the same thing with regards to the inflating in accounting firms. I just left a CA firm in February and you wouldn't believe some of the fees we were charging. For example we would do about 6 hours of work, it would sit with the Partner for review - they then gauge if they can get away with jacking up the bill over last years invoice. So you quickly see it going form $2K --> $2.7k ---> $3.5K pretty quickly. This is despite no material changes in the investments. In fact sometimes it actually has less activity because some had recently purchased property assets and had to sell up their portfolios etc.

Basically SMSF accounting is about 70% admin/data entry and 30% compliance. So really accountants in the field should be charging a blended rate. Not at the crazy professional accounting rates of $200p/h.

The other thing with respect to costs is you have some firms with higher PI insurance. I got my renewal the other day it was only ~$1,000 p.a. (about $100K in fees). Whereas an older business services accountant I do some work for is about $7K for about $1.2M book size.

From the prospective of a smaller provider we basically are not too fussed about maximising fees, we value referral relationships more.

Just being curious what kind of structure works with forum members? 
And what sort of fee structure would make you switch from your current accountant? I had been toying with the idea of 20% less your previous accounting invoice; as a basic no questions asked take-over formula.


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## joku

My partners accounting practice does very few SMSF's. They operate in an Asian-dominant suburb where super doesn't correlate very well with overall wealth, and the surrounding Austrian-dominant suburbs are more typically low to medium wealth. They only do a few dozen SMSF's among ~5000 clients. Consider that it isn't necessarily in an accountants interest to quote competitively on SMSF work for reasons such as this. 

Also, I agree 20 trades is well above average. I'm not arguing it's a good excuse for high fees but just pointing out that traders here may not realize what type of minority they are in. My partner has a very small group of clients that trade heavily, none of whom are high wealth clients and most of whom appear to under-perform the market very consistently - some of whom consider themselves experts :


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