# SMSF - admin managers?



## CAFA1234 (2 May 2008)

I'd like to ask for comments regarding experiences that people have had with online SMSF administrators.

Good and bad - lets hear it from you all.

Unless this has already been done to death or you know of an alternative site where I can find this information. Please advise if appropriate.

Cheers
CAFA1234

To start:

There appear to be a lot less than there were 2 years ago when I set up my SMSF - suggests a few have gone out of business or have stopped marketing their product.

I guess they have discovered that it takes more than functional knowledge to run an efficient on-line business.

I'm at the stage where I'm looking at the alternatives and all feedback would be appreciated. I suspect that price alone is not the deciding the good from the bad.


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## Markcoinoz (2 May 2008)

*Re: Superfund - admin managers*

Hi CAFA1234,

I set up a SMSF last year.
My concern was always going to be the administration side of things.

Thats when a friend mentioned to me about a SMSF Hybrid whereby you pay them for all their administration services and it provides you with easy access for buying and selling all category of shares without the hassles.

Its a very basic no frills Superfund.

It works very well for me in my situation.

Since i have joined, they have moved me across to another Broking Firm.
Not sure what the reason is except to know that they get a small percentage from every trade i make.

I also have noticed recently a few of these companies are no longer around.

Maybe not enough money in it for them.

Cheers markcoinoz


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## CAFA1234 (2 May 2008)

*Re: Superfund - admin managers*



Markcoinoz said:


> Hi CAFA1234,
> 
> I set up a SMSF last year.
> My concern was always going to be the administration side of things.
> ...




Can I guess that you were moved from e-trade to Commsec?


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## Julia (2 May 2008)

*Re: Superfund - admin managers*

I'm not clear about what you're looking for.
You have the Trust Deed etc - the SMSF is set up and is running.
What do you want done for you?
The only admin required is very basic record keeping, plus simple filing of contract notes, bank statements etc.  Then you can just take that stuff into your accountant once a year for the tax return and audit.  Do you need something done which is additional to this?

I just find it hard to see why you would want to pay a percentage on all your trades for such basic record keeping, so I must be missing something.


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## CAFA1234 (2 May 2008)

*Re: Superfund - admin managers*



Julia said:


> I'm not clear about what you're looking for.
> You have the Trust Deed etc - the SMSF is set up and is running.
> What do you want done for you?
> The only admin required is very basic record keeping, plus simple filing of contract notes, bank statements etc.  Then you can just take that stuff into your accountant once a year for the tax return and audit.  Do you need something done which is additional to this?
> ...




This is what I'm looking for... see first post.
To start:
There appear to be a lot less than there were 2 years ago when I set up my SMSF - 
I'm at the stage where I'm looking at the alternatives and all feedback would be appreciated. I suspect that price alone is not the deciding the good from the bad.

----
I'm not sure I understand your comment about a percentage...??

Where am I now? As stated looking for a better level of service and would like to know the experiences of others. Do you have this experience?


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## Markcoinoz (2 May 2008)

*Re: Superfund - admin managers*



CAFA1234 said:


> Can I guess that you were moved from e-trade to Commsec?





CAFA1234,

Can you see my screen???

LOL!!!

Yes you are correct.

You obviously know who i am talking about then.

Very happy with them so far.



Cheers markcoinoz


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## CAFA1234 (2 May 2008)

*Re: Superfund - admin managers*



Markcoinoz said:


> CAFA1234,
> Can you see my screen???
> LOL!!!
> Yes you are correct.
> ...




That's good. I'm very pissed off with them, but that's why I wanted to give them the benefit of the doubt and to find out if they are good when compared to other mobs.

In 2 years they have changed bank accounts and trading accounts and apply pressure to force customers to change. As it happens I trade via Commsec but not because e-super told me to.

Tell me, did you get hit with an arbitrary charge for a new Trust deed last last year?


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## Markcoinoz (2 May 2008)

*Re: Superfund - admin managers*



Julia said:


> I'm not clear about what you're looking for.
> You have the Trust Deed etc - the SMSF is set up and is running.
> What do you want done for you?
> The only admin required is very basic record keeping, plus simple filing of contract notes, bank statements etc.  Then you can just take that stuff into your accountant once a year for the tax return and audit.  Do you need something done which is additional to this?
> ...




Julia,

I don't pay a percentage.

Commsec pay the administrators a small percentage for me using their online broking service.

As well, i pay $595 yearly for the complete administration including the trust deed, Record keeping, ATO etc....

Considering i don't want to be bogged down and i am running a business as well including family ties the last thing i want is to have to manage the administration side of things for my SMSF.  I do enough administration without having to add to it.  $595 a year is nothing to have peace of mind and knowing i have complete control of my Super.

Cheers markcoinoz


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## Markcoinoz (2 May 2008)

*Re: Superfund - admin managers*



CAFA1234 said:


> That's good. I'm very pissed off with them, but that's why I wanted to give them the benefit of the doubt and to find out if they are good when compared to other mobs.
> 
> In 2 years they have changed bank accounts and trading accounts and apply pressure to force customers to change. As it happens I trade via Commsec but not because e-super told me to.
> 
> Tell me, did you get hit with an arbitrary charge for a new Trust deed last last year?




CAFA1234,

Yes!!  I was hit as well.
However, it was a legitimate change because of the recent changes to Super.
They have also said that even if there are further changes i will not have to pay any additional fees.

I was in Etrade when they decided to make the switch to Commsec.
Do not like the Commsec website one little bit.
Thankfully i have another Online broker that i use for information and platforms.

Am not keen to change to another Superfund, unless there are problems down the track.

I will stick with them for a while.

Cheers markcoinoz


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## CAFA1234 (2 May 2008)

*Re: Superfund - admin managers*



Markcoinoz said:


> CAFA1234,
> 
> Yes!!  I was hit as well.
> However, it was a legitimate change because of the recent changes to Super.
> ...




For sure. What has really annoyed me is that I received a letter, giving only 3 weeks notice that because I didn't agree to change to MCT for my bank account (nearly two years ago) they where going to transfer my admin to another accountant.

As if this was not bad enough (very poor form as this was some 6 months after they stopped debiting by bank account for their monthly fees ) as they clearly had made this arbitrary decision many months beforehand without any communication to that effect, they then debited $200 for a new standard Trust deed AFTER deciding to close the account. 

I've always paid extra because I didn't want the MCT bank account and have been happy to do so  - but clearly this was not sufficient to compensate for not maintaining the MCT account. 

Everyone has to earn a living and I'm happy to pay for a service, but I hate being screwed by anyone. Be warned my friend and be careful - document everything and confirm everything in written form.


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## Tom Ronalds (2 May 2008)

@CAFA1234

Just a general question:

If you are living permanently in the USA, how have you been getting around the SMSF residency requirement?

I ask because I am aware of at least a couple of people who have had their SMSF declared non-compliant by the ATO for that same reason.

Tom R


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## CAFA1234 (3 May 2008)

Tom Ronalds; said:
			
		

> @CAFA1234
> Just a general question:
> If you are living permanently in the USA, how have you been getting around the SMSF residency requirement?
> I ask because I am aware of at least a couple of people who have had their SMSF declared non-compliant by the ATO for that same reason.
> Tom R




A good question Tom! I actually split my time between Sydney and L.A. and ensure that I have at least contiguous 28 days  in Aus every year. My adviser says that that is compliant to retain residency. I also am on the electoral role, pay my Aussie tax and for many of the practical purposes within the ATO guidelines I'm Aus Resident. So I'm told.

However if you have differing viewpoint, alway happy to gain a better understanding of ATO interpretations. 


Tom - a question for you. What from my posts above, suggests that I live permanently in the USA? I'm keen to understand.


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## Tom Ronalds (3 May 2008)

CAFA1234 said:


> A good question Tom! I actually split my time between Sydney and L.A. and ensure that I have at least contiguous 28 days  in Aus every year. My adviser says that that is compliant to retain residency. I also am on the electoral role, pay my Aussie tax and for many of the practical purposes within the ATO guidelines I'm Aus Resident. So I'm told.
> 
> However if you have differing viewpoint, alway happy to gain a better understanding of ATO interpretations.




The general residency for tax purposes rules could certainly be clearer than they are, and it is impossible to give an opinion based on the paragraph above. As a very general rule, if you have a "permanent abode" overseas, you work overseas and are absent from Australia for a major part of two years, you would be declared a non-resident.

I am not sure what significance the 28-day annual residency would have on this; in most cases this alone would not be sufficient for you to remain a tax resident here. 

Here's a document from the ATO legal database explaining their reasoning on the topic:

http://tinyurl.com/6h9ktv

And here's the actual tax ruling:

http://tinyurl.com/6cdxf2

And here's a concise explanation of the current SMSF residency rules, again straight from the ATO:

http://tinyurl.com/6nm8mv



> Tom - a question for you. What from my posts above, suggests that I live permanently in the USA? I'm keen to understand.




Your signature says Sydney/LA and in a post elsewhere you stated you were a Brit turned Aussie now living in the USA.

Cheers,

Tom R


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## CAFA1234 (3 May 2008)

Tom Ronalds; said:
			
		

> The general residency for tax purposes rules could certainly be clearer than they are, and it is impossible to give an opinion based on the paragraph above. As a very general rule, if you have a "permanent abode" overseas, you work overseas and are absent from Australia for a major part of two years, you would be declared a non-resident.
> 
> I am not sure what significance the 28-day annual residency would have on this; in most cases this alone would not be sufficient for you to remain a tax resident here.




Tom, You're a star, thanks mate!

I found this on the web..
*The residency test – central management and control*
In order for a superannuation fund to be regarded as a complying fund, it must satisfy certain residency requirements.
Prior to 1 July 2007, in order to meet these residency requirements, a superannuation fund needed to ensure that the central management and control of the fund was located in Australia. These residency requirements allowed trustees to be temporarily outside of Australia for a period of not more than 2 years and continue to satisfy the central management and control test.
Further, under the pre 1 July 2007 rules, the trustee returning to Australia for a period of 28 days or more, before subsequently returning overseas, could effectively have restarted this 2-year temporary absence period. This therefore provided some scope for trustees to effectively extend their overseas stay to periods longer than 2 years.
What’s changed?
Since 1 July 2007, the new residency requirements state that the central management and control of a superannuation fund must ordinarily be in Australia.
Similar to the pre 1 July 2007 requirements, the new rules state that the central management and control of a fund will be treated as being ordinarily in Australia even if that central management and control is temporarily outside of Australia for a period of not more than two years.
However, the new residency requirements remove the 28-day rule, making the residency requirements much more restrictive on trustees.
----------------------------------------------------

Does this mean that I have until 1st July 2009 to return to Aus or appoint new trustees? I'm sure my existing admin manager would have told me sooner or later (???).

In your view does the fact that I was also working in Aus for Jan/Feb/March under Aus payroll have an impact?


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## Tom Ronalds (3 May 2008)

CAFA1234 said:


> Tom, You're a star, thanks mate!




Hardly, but financial planning for SMSF Trustees is generally what I do in my professional capacity, so some familiarity with the topic is required!;-)



> I found this on the web..
> *The residency test – central management and control*
> In order for a superannuation fund to be regarded as a complying fund, it must satisfy certain residency requirements.
> Prior to 1 July 2007, in order to meet these residency requirements, a superannuation fund needed to ensure that the central management and control of the fund was located in Australia. These residency requirements allowed trustees to be temporarily outside of Australia for a period of not more than 2 years and continue to satisfy the central management and control test.
> Further, under the pre 1 July 2007 rules, the trustee returning to Australia for a period of 28 days or more, before subsequently returning overseas, could effectively have restarted this 2-year temporary absence period. This therefore provided some scope for trustees to effectively extend their overseas stay to periods longer than 2 years.




Yes, that is a correct summary. I guess to confuse matters further though - don't you just love the Australian "simplified" tax system! - the rules for SMSF Trustees residency (and therefore by extension the "management and control of the SMSF) are quite different from the general tax residency rules.

Meaning that you could in fact be a non-resident for tax purposes and yet satisfy the SMSF residency rules.

The 28-day rule normally is not considered for personal tax residency status. Hence my earlier comment.



> What’s changed?
> Since 1 July 2007, the new residency requirements state that the central management and control of a superannuation fund must ordinarily be in Australia.
> Similar to the pre 1 July 2007 requirements, the new rules state that the central management and control of a fund will be treated as being ordinarily in Australia even if that central management and control is temporarily outside of Australia for a period of not more than two years.
> However, the new residency requirements remove the 28-day rule, making the residency requirements much more restrictive on trustees.




Not necessarily more restrictive, but the biggest problem with the new/current rules is that they are somewhat "fuzzy". You don't have a specific number or a situation there which would allow you to relatively easily determine where you stand.

Again, there's been some lobbying going on to clarify the regulation a bit better, but given that governments typically only operate at two speeds (slow or very, very slow), it is unlikely this will be amended for some time.



> Does this mean that I have until 1st July 2009 to return to Aus or appoint new trustees?




Obviously that depends on quite a few things - how long you have been away, whether you are resident for tax purposes, where do you ordinarily reside and so on.

Unfortunately as I have said earlier, the rules are not overly clear and sadly in many cases the only way to be sure is to apply to the ATO for a private ruling.

Having said that, any private ruling will apply to the set of your personal circumstances you gave the ATO when you applied. If your situation changes often, it may be better for you to either change the SMSF to a SAF (small APRA fund), or depending on the fund's Trustee structure (i.e. corporate/individual etc) it could in some cases be possible to craft an appropriate structure through a corporate Trustee whereby the residency rule is satisfied even if you are away for many years at a time.



> I'm sure my existing admin manager would have told me sooner or later (???).




If they didn't, you'd have a good case against them once the ATO declared your SMSF non-compliant and taxed the entire concessional component at the top marginal tax rate.



> In your view does the fact that I was also working in Aus for Jan/Feb/March under Aus payroll have an impact?




In most circumstances it would - particularly if your Australian-domiciled employer paid SGC contributions to your SMSF on your behalf.

Cheers.

Tom


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## CAFA1234 (7 May 2008)

Tom Ronalds; said:
			
		

> Meaning that you could in fact be a non-resident for tax purposes and yet satisfy the SMSF residency rules.
> Obviously that depends on quite a few things - how long you have been away, whether you are resident for tax purposes, where do you ordinarily reside and so on.




My, this does get complicated!



> In most circumstances it would - particularly if your Australian-domiciled employer paid SGC contributions to your SMSF on your behalf.




I'm not sure there was SGC, but there was substantial salary sacrifice paid by Aussie employer - would that be sufficient to establish a marker for the two year rule. Understand that you are not giving advice, and only opinion


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