# How to run your own successful Super Fund



## Panaman

Hello, first post after just reading for a few months.

iam not an experienced investor but have done some reading and research and now seriously thinking I could easily run my own superfund, so any advise or tips from those who run there own fund would be good.

I would like to use a firm like esuperfund to run everything, they are low cost and from reading this forum and other online searches most reviews are very positive, they however don’t give advice and you must use there partners for investments and bank account but from what they offer I cant see any problem with this.

I want to keep things simple and use etf investments and take a long term view as I still have about 20 years to retirement so thought if I allocate 50% to shares, 40% to fixed interest and 10% to property, would this be a good suggested mix?, ive really just looked at were super funds invest and simplified it, I will also salary sacrifice and have my employer contributions paid into a bank account and each year buy the percentage allocation to the investments, so for example half will be spent on adding to the share holding etc, I don’t want to be trading in and out of the market, iam not experienced at that nor do I think it necessary to achieve a comfortable return, good investments over time even through crisis can average over 8 to 10% a year and if I can get that I will be happy, my current AMP superfund even doing very well the past 12 months has come no were near that.

For shares I thought I would use an index fund (Vanguard ASX 300 etf) and a listed share fund(Argo investments), this will give me a spread over all the top 300 companies.

For cash/fixed interest I will again split this in half, with a 6 month rolling term deposit and an investment  in the Vanguard Australian fixed interest index etf.

For property I would invest in a property etf, although I have not decided which one as it looks like most invest in property trusts which I would most likely be holding anyway through the shares etf and Argo so any suggestions here would be good.

Is this doable and in the opinion of those who have run there own funds, outperform the big retail funds?, and lastly any other suggestions as to were to invest?


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## ROE

It is possible to run your own fund and get very good return, I have SMSF and invest fully in the market 
having said that, it been heavily promoted that everyone can do it, the truth is most cant...

you need sound knowledge of the markets and its mechanics and be able to make your own decision based on your judgement and knowledge.

you got to be able to distinguish fear/greed from fictions and facts

Like anything in order to beat other you got to have qualities other don't have or make better judgement and pick stocks selection better etc.

I don't think it so hard that most cant do it, it just takes time, certain personalities and your willingness 
to learn and research.


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## Muschu

. We are semi retired and have had a SMSF for about 5 years.  It can be time consuming but I use an online analyst to support decision making.  I pay for this but it has been worth it and better than the uninformed financial advisor I used previously.  
I am also quite a conservative investor ... Probably as I am 68.


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## Julia

Panaman said:


> I don’t want to be trading in and out of the market, iam not experienced at that nor do I think it necessary to achieve a comfortable return, good investments over time even through crisis can average over 8 to 10% a year and if I can get that I will be happy, my current AMP superfund even doing very well the past 12 months has come no were near that.



Can you say, given that you have told us you are inexperienced, why you think you will be able to achieve a better result than that achieved by professional fund managers, eg as above AMP.

The above question does not reflect any comment on any public fund, none of which I  have any experience of or interest in.  Just suggesting you should be realistic about what returns you can expect as a novice.


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## Panaman

Hi Julie, and yes I understand what your saying, and no doubt the big Super funds would laugh at a novice in Western Sydney trying to outperform them with his own Superfund, but until I started doing some investigation I quickly started to change my mind and the more I read and investigate this the more iam convinced anyone could do it with just basic knowledge, last week I discovered there are diversified funds which look almost identical to super funds in how they invest but the fees for example with the vanguard funds are just 0.35%, yet over the last 10 years many have hit that 8-10% average annual return verses the 3-5% Super funds have managed.

For me this is becoming a no brainer, rather than try and allocate your super just put it all in a good diversified fund that has a history of delivering good returns with low fees, 5 easy steps and your set.

1)	Open an account with say Esupefund, free set up then $700 a year
2)	Transfer all your super to the ANZ account they set up for you
3)	Invest in a diversified fund like the Vanguard Growth fund
4)	Have employer contributions and salary sacrifice deposited in the ANZ account
5)	Set up a periodic payment each month from ANZ to Vanguard fund


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## Kaizen

Panaman said:


> Hi Julie, and yes I understand what your saying, and no doubt the big Super funds would laugh at a novice in Western Sydney trying to outperform them with his own Superfund, but until I started doing some investigation I quickly started to change my mind and the more I read and investigate this the more iam convinced anyone could do it with just basic knowledge, last week I discovered there are diversified funds which look almost identical to super funds in how they invest but the fees for example with the vanguard funds are just 0.35%, yet over the last 10 years many have hit that 8-10% average annual return verses the 3-5% Super funds have managed.
> 
> For me this is becoming a no brainer, rather than try and allocate your super just put it all in a good diversified fund that has a history of delivering good returns with low fees, 5 easy steps and your set.
> 
> 1)	Open an account with say Esupefund, free set up then $700 a year
> 2)	Transfer all your super to the ANZ account they set up for you
> 3)	Invest in a diversified fund like the Vanguard Growth fund
> 4)	Have employer contributions and salary sacrifice deposited in the ANZ account
> 5)	Set up a periodic payment each month from ANZ to Vanguard fund




Sounds like what most super funds do anyway. Why not avoid all the paper work and leave it as is use a platform that allows you to do that. I have an IOOF fund and I can buy and sell shares but do not worry about the admin.


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## Panaman

Kaizen said:


> Sounds like what most super funds do anyway. Why not avoid all the paper work and leave it as is use a platform that allows you to do that. I have an IOOF fund and I can buy and sell shares but do not worry about the admin.




Thanks for that, I never had a clue this sort of thing was available, will spend a few hours investigating this.


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## Bill M

Panaman said:


> Thanks for that, I never had a clue this sort of thing was available, will spend a few hours investigating this.




Panaman, there are a few super funds that allow you to make your own investments and they do all the compliance and reporting. To me they are like having a SMSF but without you having to do the compliance.

I am with ING Living Super. I can invest in cash and term deposits without fees. I can also buy shares, ETF's and funds like Vanguard. I can do all the allocation myself without a great deal of interference from ING. For me to buy and sell my own ETF's or shares they will charge me only $180 per year (plus per parcel brokerage). It is not bad, no $700 per year fees. There are some restrictions but from what it sounds like it might suit you. 

Have a look here: http://www.ingdirect.com.au/super_and_retirement/living_super.htm


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## craft

Does anybody know if these superannuation share trading platforms keep individualised account of deferred capital gains tax?  

Is it accounted for as per how a SMSF would do it or how a traditional collective super fund does it?

Probably doesn’t matter for anybody over 60 but could have big (yet obscure) implications for those in accumulation phase especially as they turn 60.


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## Ves

craft said:


> Is it accounted for as per how a SMSF would do it or how a traditional collective super fund does it?



AustralianSuper at least does it closer to how a traditional super fund does it,  rather than like an SMSF  (where you pay upon lodgment of your return and PAYG Instalments as you go if applicable).

The MemberDirect option from AustralianSuper deducts any tax applicable on the day that income is received.  Therefore the cash outflow for tax is upfront,   which could be considered as an important timing difference vs an SMSF.  Taxable contributions are treated in the same way.  However,  it seems that you receive franking credits up front,  which could compensate for other timing differences.

CGT is even more opaque vs an SMSF.  Realised gains / losses are treated as tax credits and an adjustment (cash in / out flow is made each quarter) by the looks of it.

The unrealised CGT... I'm not sure what to make of it.   They deduct any applicable tax from the portfolio valuation,   but  I am not sure it that means  they actually make a cash adjustment each quarter.  You would think that they wouldn't.   

The big advantage (tailwind) that long-term investors get from deferred tax liabilities in an individual holding or SMSF is taken away if they make cash adjustments for the tax on unrealised gains.  Perhaps someone else who actually has one of these accounts could answer?

http://www.australiansuper.com/~/media/Files/Guides/MemberDirect_Guide.ashx


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## So_Cynical

Ves said:


> CGT is even more opaque vs an SMSF.  Realised gains / losses are treated as tax credits and an adjustment (cash in / out flow is made each quarter) by the looks of it.




I have noticed how Members direct keeps a certain untouchable amount in your transaction account..and noticed how this builds as you close trades, seem to be some sort of tax provisioning. :dunno:


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## Julia

Re the various alternatives to a SMSF, do they also undertake responsibility for keeping you informed of, or organising, any legislative or administrative requirements throughout the year?

eg if you were in pension phase do they advise you of the amount you are required to draw during the coming f/y?

Do they do Minutes and Investment Strategy, and if so, in how much detail?  Advise you when your Trust Deed needs to be updated and arrange this for you?


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## Ves

Julia said:


> Re the various alternatives to a SMSF, do they also undertake responsibility for keeping you informed of, or organising, any legislative or administrative requirements throughout the year?
> 
> eg if you were in pension phase do they advise you of the amount you are required to draw during the coming f/y?
> 
> Do they do Minutes and Investment Strategy, and if so, in how much detail?  Advise you when your Trust Deed needs to be updated and arrange this for you?



The answer to most of these questions comes from looking at the difference in ownership / trustee structure compared to a SMSF.

In a self-managed account (SMA) / direct investment option that is housed within an Industry or Retail Fund it is the Fund (well,  it's nominated reponsible entity) itself is the trustee - and has the ultimate responsibility of complying with any legislation or administrative requirements in that role. The Fund itself files all of the paperwork / documentation -  the member has no responsibility for it. Without being a legal expert myself,  I assume that as the responsible entity they have the legal ownership of all of the underlying assets,   and the members have a beneficial entitlement to them.    There is no legislative requirement for a member to prepare an investment strategy or minutes if they are a member of an Industry / Retail Fund. There is obviously nothing stopping you from doing this,  and it may be a good habit to get into for most people and you can certainly still receive financial advice from a licensed professional if you so wish.    However the responsible entity as trustee can,  and does,  enforce certain investment restrictions  (such as limiting to ASX300,  minimum bank account balances etc etc) that are mostly designed to a) cover their own **** and b) help provide the most cost effective operation.

Within an Industry / Retail Fund I believe that pension payments are automated (direct debit) and are usually paid on a monthly basis to ensure that members take at least the minimum pension.  For for information most of the large funds will outline this in their financial services guide or product disclosure statement.

Tl;dr  -   the Industry / Retail Fund is required to prepare all of the administration and paperwork because they are the responsible entit by law.

SMSF is obviously different because the members and the directors / trustees are the same people.


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## Julia

Ves said:


> The answer to most of these questions comes from looking at the difference in ownership / trustee structure compared to a SMSF.



Sorry.  My question was misleading because of the omission of a few words.  It should have read:


> Re the various alternatives to a SMSF *using one's own accountant*, do they also undertake responsibility for keeping you informed of, or organising, any legislative or administrative requirements throughout the year?
> 
> eg if you were in pension phase do they advise you of the amount you are required to draw during the coming f/y?
> 
> Do they do Minutes and Investment Strategy, and if so, in how much detail? Advise you when your Trust Deed needs to be updated and arrange this for you?




What I'm curious about is - given one wants to run one's own SMSF, there seem to be the options of using your own accountant or one of the el cheapo options like Esuperfund, which I understand offers initial set up and then annual tax return and audit.

Are we comparing like with like, eg as in my questions above?

The responsibilities of running a SMSF should not be under estimated.  I depend on my accountant to keep me up to date with everything I need to know and to answer any queries I might have throughout the year without being billed additionally for this.
It's somewhat difficult to imagine that the 'one size fits all' model is going to be able to take into account all individual circumstances and offer individual advice for the price.


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## ROE

Julia said:


> Sorry.  My question was misleading because of the omission of a few words.  It should have read:
> 
> 
> What I'm curious about is - given one wants to run one's own SMSF, there seem to be the options of using your own accountant or one of the el cheapo options like Esuperfund, which I understand offers initial set up and then annual tax return and audit.
> 
> Are we comparing like with like, eg as in my questions above?
> 
> The responsibilities of running a SMSF should not be under estimated.  I depend on my accountant to keep me up to date with everything I need to know and to answer any queries I might have throughout the year without being billed additionally for this.
> It's somewhat difficult to imagine that the 'one size fits all' model is going to be able to take into account all individual circumstances and offer individual advice for the price.




I have my own accountant and auditor and dont use cheapo online one like esuperfund
too much hassle if you operate outside their fix structure, like banks account, brokers and what instruments to use

having my own accountant I am 100% free to do what I like, use any platform, bank accounts, instruments etc...
its not actually that hard once you nail the paperwork habit..

basically my auditor wont sign off until each transaction is account for and I have documents supporting it...
so as soon as a transaction is executed via my SMSF I file the paperwork/record...

I buy stocks today, download contracts, print and file
I sell a couple of options, download contracts, print, file
Print banks statement each month, file
Print dividend statement as soon as I received them, file  etc...etc...

end of the year all there....accountant check, auditor check, done


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## Ves

Julia said:


> Are we comparing like with like, eg as in my questions above?



According to their website (http://www.esuperfund.com.au)  the answer to your questions would be yes.    I haven't actually had any experience with dealing with them - so I'm just going on what I have read.

You obviously get what you pay for -  but there is no reason that you cannot leave Esuperfund if you aren't happy with their service / restrictions.


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## Panaman

Seems a lot I have learnt from this so far so thank you, need to decide if I should have my own fund or use the likes of IOOF or ING.

Can I ask those who run there own funds how they do so? As iam still deciding to either go with a good managed fund like Vanguard or allocate myself, that is if you want exposure to property for example how do you get that, through direct ownership that is you buy real estate via your fund, or are there funds or stockmarket etfs that can be used?

With shares, do you invest for the long term or trade in and out of shares or use the etf,s, then for fixed interest, is it term deposits or etf,s, I can see you can buy bonds but the minimum is very high, (50K), how else can you get exposure to this sector.


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## Julia

Panaman:  my suggestion would be for you to get some professional advice, given the sort of questions you're asking.    What some of us do in terms of how we invest in our SMSFs will be driven by our personal circumstances and isn't necessarily relevant to what would be best for you.

The reason most people start their own SMSF is to take control over every aspect of their investments, and because they believe they have the competence and experience to achieve a superior result.  They don't want to outsource the choice about how their funds are invested to some fund manager.


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## ROE

Panaman said:


> Seems a lot I have learnt from this so far so thank you, need to decide if I should have my own fund or use the likes of IOOF or ING.
> 
> Can I ask those who run there own funds how they do so? As iam still deciding to either go with a good managed fund like Vanguard or allocate myself, that is if you want exposure to property for example how do you get that, through direct ownership that is you buy real estate via your fund, or are there funds or stockmarket etfs that can be used?
> 
> With shares, do you invest for the long term or trade in and out of shares or use the etf,s, then for fixed interest, is it term deposits or etf,s, I can see you can buy bonds but the minimum is very high, (50K), how else can you get exposure to this sector.




I have direct ownership of shares because I like to invest in stuff I want and discard the rest 
rather than throw in the index/efts with the good and the bad....

I also use other instruments such as Options, CFDs, Warrants to enhance return
my cash usually sit at call account (earning ~1% or so above RBA rate)

I don't know when I need the cash as opportunity can presented at any time so locked them in 
term deposit is a no go zone for me...


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## Panaman

Julia said:


> Panaman:  my suggestion would be for you to get some professional advice, given the sort of questions you're asking.    What some of us do in terms of how we invest in our SMSFs will be driven by our personal circumstances and isn't necessarily relevant to what would be best for you.




I have seen a financial advisor, all they did was want me to transfer my Super from AMP to them, when I asked how there funds had performed over the last 10 years he had to look it all up and then waffled on about the financial crises and so 4.5% PA was pretty good considering, when I said I was considering running my own superfund he was almost smirking and said similar to you that I should leave these things to the professionals, well the professionals don’t seem to have done a very good job in my opinion, a simple investment in an stock index etf and left for 10 years beats them hands down.

All iam trying to do is find out how people invest n different sectors and what sort of products they use, shares are pretty straight forward but fixed interest and property is not apart from term deposits or investing in property trusts, iam not asking anyone to tell me exactly what they do, as you say everyone’s situation is different..

Iam not rushing into this but cannot see why anyone even a tradesman in Western Sydney with no university degree cant do this themselves and do better with some well researched and quality and proven investments than the big supefunds who milk our account with fees and charges, even in the good years they have performance fees to take more from your account, pity they don’t have underperformance clauses were they reimburse you, think most would have gone out of business if they had.


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## ROE

Panaman : I think you dead set and driven to run your own SMSF, give it a shot it may ticks for you but be prepare if things don't work out.

I don't have background in finance or accounting or anything to do with financial market.

some of the best and richest investor in the world has no background in finance...they comes from all walks of life
laws, engineering, uni drop out....

Good luck.


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## burglar

ROE said:


> Panaman : I think you dead set and driven to run your own SMSF, give it a shot ...




I agree with ROE!

A winner is a loser who doesn't give up.
There is one HUGE thing this forum has done for me.
It has fuelled my persistence.


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## Julia

Panaman said:


> when I said I was considering running my own superfund he was almost smirking and said similar to you that I should leave these things to the professionals,



(Sigh.)
I didn't say any such thing.  I wouldn't be entrusting my super to any fund manager, but then I'd had twenty years of investing experience across property and shares before I started my SMSF.

You have, as ROE says, obviously already made up your mind that you're going to start a SMSF so I'll just say good luck.
(Note to self:  remember the resolve to stay out of these threads.)


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## craft

Bill M said:


> Panaman, there are a few super funds that allow you to make your own investments and they do all the compliance and reporting. To me they are like having a SMSF but without you having to do the compliance.
> 
> I am with ING Living Super. I can invest in cash and term deposits without fees. I can also buy shares, ETF's and funds like Vanguard. I can do all the allocation myself without a great deal of interference from ING. For me to buy and sell my own ETF's or shares they will charge me only $180 per year (plus per parcel brokerage). It is not bad, no $700 per year fees. There are some restrictions but from what it sounds like it might suit you.
> 
> Have a look here: http://www.ingdirect.com.au/super_and_retirement/living_super.htm




I have had a SMSF for nearly a decade and require it to invest in smaller companies and it is deeply ensconced in my estate plan so I have never looked at these platforms within super funds as they weren't around before I bailed to a SMSF. But I did dig into the link Bill M supplied to get some answers to my earlier tax ponderings and am pretty impressed.

The big one for me is that they do seem to keep your deferred CGT obligations separated and you can benefit from that when turning 60.



> If you transfer from a Super account to a TTR or Pension account, or vice versa, the following tax treatment will apply:  Listed securities may be transferred in specie and once sold will be subsequently taxed under the capital gains treatment of your new account




Still some small timing issues with tax cash flows and potential collective issues with things like franking holding periods etc. but in my view these platforms are a huge leap in both accounting fairness, cost and investment control over traditional collective superannuation and probably for many people a better alternative than a SMSF. 


Easier and unless I'm missing some fees its cheaper then a SMSF. So unless their is some specific asset class you want to invest in not covered by the platforms or some estate planning reason etc - don't dismiss this option. From what Panaman has put so far it looks like it would suit his needs.


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## fiftyeight

Some good info in this thread.

I have wanted more control over my super but having minimal capital its not worth me having a SMSF. The ING type setup looks like it might suit my needs. Will definitely be looking into it more during the week.

Cheers all


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## Bill M

craft said:


> Easier and unless I'm missing some fees its cheaper then a SMSF. So unless their is some specific asset class you want to invest in not covered by the platforms or some estate planning reason etc - don't dismiss this option. From what Panaman has put so far it looks like it would suit his needs.





You are right craft. This ING Living Super fund only got started last year. I waited quite a while before I got into it. My main reason for getting into it was that I could lock in market rate term deposits for 2 years without fees. Other retail funds will be very very lucky to make 2.5% on their cash components in the 2013 - 2014 tax year. I invested in a 2 year term deposit and got 4.7% P/A interest. Currently I think that TD is 4.2%. I would rather get 4.7% than 2.5% any day.

You mentioned what you can not invest in. I invest in hybrids, convertible notes and floating rate notes. You can not buy these direct on the ING platform because they don't make the top 200 ASX listed stocks. I can not invest in smaller companies either but I don't do that anyway so it doesn't affect me. I mostly invest in bigger companies with a history of paying dividends and all those fall into the top 200.

Somebody also mentioned, rules and compliance. I do absolutely nothing with ING. They are the ones who do all that. At the end of the financial year I just got a statement how much personal contribution I made and what to do if I want to claim a tax deduction. The rest is all online and clearly shows your income and Government tax deductions for the year. All you need to be aware of is how much you are putting in. Be very aware of your caps on how much you have put in both taxed and untaxed as there are limits. Apart from that, nothing else to do. I still don't know how I will deal with my hybrids, convertible notes and floating rate notes but for now they remain out of the super system.

Here is an article about ING Living Super, they seem to be getting plenty of customers. http://www.smh.com.au/money/super-and-funds/lifes-looking-good-for-ings-living-super-20130326-2grlc.html


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## Panaman

Julia said:


> Panaman:  my suggestion would be for you to get some professional advice.




Julia

I have re-read what I wrote, (that all came out wrong), you did not say I should get professionals to run my Super, you said I should seek advice so please accept my apology.

As I have said before all iam trying to do is find out what products people who run their own super use and try and get as much insight as to what it takes to run your own fund successfully, many people say they run their own funds but very few seem to be forthcoming (thanks to those that have been though) as to what type of products they use, iam not asking for specific advise iam just trying to get a handle on what products are out there that people are actually using, Real estate for example, unless you have a large balance in your fund, buying  physical land and buildings is out of the question so how do people get exposure to this sector.


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## McLovin

Panaman said:


> Julia
> 
> I have re-read what I wrote, (that all came out wrong), you did not say I should get professionals to run my Super, you said I should seek advice so please accept my apology.
> 
> As I have said before all iam trying to do is find out what products people who run their own super use and try and get as much insight as to what it takes to run your own fund successfully, many people say they run their own funds but very few seem to be forthcoming (thanks to those that have been though) as to what type of products they use, iam not asking for specific advise iam just trying to get a handle on what products are out there that people are actually using, Real estate for example, unless you have a large balance in your fund, buying  physical land and buildings is out of the question so how do people get exposure to this sector.




I use an accountant. A good accountant is worth their weight in gold. I guess it really does depend how much you're going to have in the fund though. If it's a smaller amount then maybe one of the cheaper options is worth it (I have no experience with them).


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## Julia

Panaman said:


> Julia
> 
> I have re-read what I wrote, (that all came out wrong), you did not say I should get professionals to run my Super, you said I should seek advice so please accept my apology.



It's fine, Panaman.  Easy enough to misinterpret something.



> As I have said before all iam trying to do is find out what products people who run their own super use and try and get as much insight as to what it takes to run your own fund successfully, many people say they run their own funds but very few seem to be forthcoming



OK, fwiw I use my own accountant, someone I've been with for several years.   Yes, I pay more than I would if I used Esuper et al, depends on the volume of work in any given year, usually around $1500 including audit, which seems entirely reasonable to me, given I have someone I trust to sound things off on throughout the year, who I can depend on to keep me up to date with anything I need to know, and to attend to all the stuff like investment strategy, minutes etc.

Re investing in property:  can you do this via Esuperfund or ING et al?

Bill, you mentioned being happy with the TD rate via ING.  Presumably you have to access what is available through them, eg you can't negotiate your own rate with a bank?


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## Bill M

Julia said:


> Bill, you mentioned being happy with the TD rate via ING.  Presumably you have to access what is available through them, eg you can't negotiate your own rate with a bank?




Yes that is correct Julia, I have to take what ING offers itself, I can not for example open a TD with say UBANK and put that in my account. ING however, are competitive with rates I must say.

Panaman, I have not started buying shares, LIC's or ETF's within my account as yet. However what I have done in the past (outside super) was purchase an ETF in the property sector. One such ETF is SLF, fact sheet here: http://www.spdr.com.au/etf/fund/fund_detail_SLF.html 

Click on broker basket to see what they hold. There are many ETF's out there covering all sectors, look around and see what suits you.

It is as simple as logging into your account and putting in a buy order, paying your brokerage and it is in your account. The ETF itself does charge a management fee but at least this way the ticket only gets clipped once. For example if you are in a Retail Fund, your retail manager might charge a fee for management of the property component. Then you look deeper and they hire other managers like State Street Global Advisers to supply the ETF, and that ETF also has it's management fees and in the case of SLF that is .40%. Your ticket gets clipped twice this way. At least if you buy your own ETF direct within your SMSF or flexible Super Fund you only pay the fee once, hope that helps.


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## Panaman

Bill M said:


> It is as simple as logging into your account and putting in a buy order, paying your brokerage and it is in your account. The ETF itself does charge a management fee but at least this way the ticket only gets clipped once. For example if you are in a Retail Fund, your retail manager might charge a fee for management of the property component. Then you look deeper and they hire other managers like State Street Global Advisers to supply the ETF, and that ETF also has it's management fees and in the case of SLF that is .40%. Your ticket gets clipped twice this way. At least if you buy your own ETF direct within your SMSF or flexible Super Fund you only pay the fee once, hope that helps.





Thanks Bill

What you have said rings pretty true and why I believe anyone with a bit of basic knowledge can run there own fund, I would be a fool if I thought I could trade shares with limited experience but with the use of the index etf,s and listed funds that the big superfund’s also use you can cut there slice of pie out of the fees you pay, also they tend to favour there own, AMP for example will use AMP funds, BT, Westpac group funds etc, I want to almost cherry pick the best manager in each, then along with the safety of term deposits build a long term portfolio

State street I thought looked good across the board, there ASX high dividend fund looks the pick of the bunch though, to be honest once ive done a bit more research and got the varies ideas on the table its then I need to implement this and stick to the plan.

So far for Shares, I like the Vanguard ASX 300 fund, State Streets High dividend fund, Argo Investments listed Fund, the BKI listed fund.

For Property the State Street property Trust etf,  then a listed company called  The Australian Social Infrastructure Fund that is mentioned by another poster on another topic called Sydboy007.

For Fixed income, Term deposits but also another stock mentioned by this Sydboy007 I checked out called the Australian enhanced income fund, then an ETF from Russell investments called the Corporate bond fund.

Then I have to get the mix right, maybe 50% shares, 25% fixed income, 15% Term deposits and 10% property and, then reinvest all dividends and add to investments or add new ones as the cash balance from contributions allows, that is a decent size to buy, maybe when it reaches $10000.


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## Julia

McLovin said:


> I use an accountant. A good accountant is worth their weight in gold.



Yes, my accountant has saved me way more than I've ever paid him in fees.


----------



## Panaman

Vanguard have now launched an emerging markets etf, so another option for those who run there own super, all we need now is some International fixed interest and property etf,s to be launched on the ASX and just about anyone could run there own superfund using the same portfolio mix as the big industry and retail funds. 

I’m almost there with setting up with esuperfund, then I can transfer my existing fund and get started


----------



## Panaman

Racing !, well not quite but im up and running, did my research and have now taken the plunge.

The balance of my Super has been removed from the clutches of AMP and invested in the following to hold for the 12 years before i hope to retire, all dividends and distributions reinvested.


30% in SYI, State Street select high dividend ETF
15% in SSO, State Street Small Ordinary’s ETF
15% in CAM,  Listed Shares and Hybrid investment fund
10% in BKI, Listed Share investment fund
7.5% in AYF, Listed Hybrid Fund
5% in BOND, State Street Bond ETF
5% in RCB, Russell Corporate Bond ETF
5% in SLF, State Street Property ETF

The remaining 7.5% has been invested in the Vanguard Lifestratagy Balanced Fund and I have also set up a direct debit for my employer contributions and salary sacrifice to be paid from my V2 account into the Vanguard fund every fortnight, as I will be salary sacrificing the full amount its going to be $25,000 a year into this Index tracking fund that is 50% Growth, 50% Income, so over the 12 years $300,000 will be paid in (hopefully).


----------



## robz7777

Panaman said:


> The full amount its going to be $25,000 a year, so over the 12 years $300,000 will be paid in (hopefully).




Cap should increase to $30k next year.. Or $35k for those over 50... But as always likely to change!


----------



## sydboy007

I'm glad a few people have been interested in AYF.  It's a cheap and easy way to get diversity into hybrids.  have my dad in it too.  He's quite happy with the 60% better yield than a TD.

AKY is another good alternative, though now it's sort of in the wind down phase as there's only 2 of the 5 years remaining for the fund, but I'm hoping there will be an AMCBF6 released sometime between now and Dec 2015 as they've been providing a tasty ~6.5% fully franked yield with minimal volatility.  Just a shame it's far easier to sell than buy the shares.


----------



## Panaman

robz7777 said:


> Cap should increase to $30k next year.. Or $35k for those over 50... But as always likely to change!




Thanks, will keep an eye on this.

If I can afford it then will go with the increase, should also have realised that I will have to pay the 15% contributions tax I think ?, so after that I will be investing $21250 per year, not $25,000, the tax being $3750, have actually just had to reset the fortnightly contribution at $850 to account for the tax, before any mathematician tells me I now it works out at a bit more but no doubt I can find a few hundred dollars each year as voluntary contributions to top up and also not forgetting my $699 to run the fund.


Thanks sydboy, if not for a few of your posts would never have come across AYF


----------



## Panaman

Decided to add a bit of my personal savings into the account and have bought some VGE, Vanguard FTSE Emerging Markets ETF as my exposure to offshore shares was small.

Overall though, so far so good


----------



## Panaman

Well I have added a final stock to the mix with another after tax injection from my personal savings, NAOS EMERGING OPPORTUNITIES COMPANY LIMITED (NCC), and i dont plan on adding anymore so my holdings roughly in percentage as of todays price are.

32% in SYI, State Street select high dividend ETF
14% in SSO, State Street Small Ordinary’s ETF
13% in CAM, Listed Shares, Top 300 LIC
12% in BKI, Listed Shares, Top 100 LIC
8% in AYF, Listed Hybrid LIC
5% in BOND, State Street Australian Bond ETF
4% in RCB, Russell Corporate Bond ETF
4% in SLF, State Street Property ETF
4% in VGE, Vanguard Emerging Markets ETF
4% in NCC, NAOS Emerging opportunity’s LIC


I plan to hold all for 10 years+ or until my goal age retirement of 65, all pretty much run themselves and all dividends will be reinvested and as im not a trader that’s what I wanted, will monitor them but to be honest I wouldn’t know if there was a problem with them or not, im relying on the managers of each to do there jobs, dividend yield overall is roughly about 5% at the moment so im happy with that as well

The Vanguard Balanced fund has been going ok and I add $1000 each fortnight from employer and salary sacrifice and will increase the amount each year if the government increases the amount i can salary sacrifice and get the tax benefit, also decided to pay the contributions tax from personal savings added to the super account, this gives me another incentive to save and currently can afford to do so, the fund is a pretty conservative though 50/50 shares and fixed interest etf,s but I figure as I get older and nearer my retirement goal I will want to be  more conservative and less volatile and as this will eventually be the largest holding then it makes sense for it to be a lower risk, the individual LIC,s and ETF,s particualy the smaller company ones have a decent time frame to make some significant gains, don’t think I would want to be buying any of these with a couple of years to go as they can swing around a fair bit. 

See a lot of people talk about running there own SMSF but very few say how or were they put there money so I hope this gives some idea that the average person can do it with a bit of research, would be interested to here from anyone with comments about my investments, have read that set and forget is not the way to go but im not going to pretend to be a trader, nor do I have the time, knowledge or desire to be one and yes its not proven this will work better than the big Super funds but I have taken how they allocate funds as a blueprint and with mainly ETF,s across the board I should pretty much mirror but also hopefully outperform a bit the better big Super funds overall with my selections while paying a whole lot less fees and charges, $699 a year to esuperfund rather than couple of percent a year to some big bank.


----------



## sydboy007

Panaman said:


> See a lot of people talk about running there own SMSF but very few say how or were they put there money so I hope this gives some idea that the average person can do it with a bit of research, would be interested to here from anyone with comments about my investments, have read that set and forget is not the way to go but im not going to pretend to be a trader, nor do I have the time, knowledge or desire to be one and yes its not proven this will work better than the big Super funds but I have taken how they allocate funds as a blueprint and with mainly ETF,s across the board I should pretty much mirror but also hopefully outperform a bit the better big Super funds overall with my selections while paying a whole lot less fees and charges, $699 a year to esuperfund rather than couple of percent a year to some big bank.




Just something to think about is that those funds you have invested in all have their internal fees.  It's good to keep an eye on them because they do add up.  Most are a lot cheaper than what many super fund charge for similar investments thought.

AFI reported they had a MER of 0.18% which seems a pretty good deal for the kind of performance they're providing.  A lot of the ETFs seem to be from 0.4% up, but stil pretty cheap fro the diversification they offer.


----------



## Panaman

sydboy007 said:


> Just something to think about is that those funds you have invested in all have their internal fees.  It's good to keep an eye on them because they do add up.  Most are a lot cheaper than what many super fund charge for similar investments thought.
> 
> AFI reported they had a MER of 0.18% which seems a pretty good deal for the kind of performance they're providing.  A lot of the ETFs seem to be from 0.4% up, but stil pretty cheap fro the diversification they offer.




Yes the internal fees that are charged do add up, most of the ETF,s are pretty low as you say, the Managed funds and most LIC,s are from what I discovered more and some managed funds considerably more!, although BKI which I thought was the best LIC,s around for large ASX stocks has one of the lowest MER of 0.17% and also doesn’t charge performance fees.

One thing I noticed when looking into doing this was many big Super funds don’t invest your money especially the industry funds, there really just administrators in the same way esuperfund are, but charge a percentage rather than a set fee to run your super, so you pay there “advertised” super low fee of under 1% they then outsource your money to the likes of BT, Macquarie etc who then charge there fees plus I expect performance and other management fees, so effectively from what I can see they are no different to the big retail funds like AMP who do invest your money.

Fees are fact of life but some of these big Super funds are raking it in for doing not that much really. Outsource the hard bit of were to invest the funds and charge 1% to administer, on the average account over the period of your working life it adds up to a hefty chunk of 10,s if not over $100,000 when you include the "hidden" fees from outsourcing a good portion of which you could save in my opinion and get a better investement return by running your own SMSF.


----------



## Wysiwyg

Panaman said:


> $699 a year to esuperfund rather than couple of percent a year to some big bank.



*Plus ATO annual supervisory levy* of $388 for June 2014. Levy was $150 when I started so increasing yearly.


----------



## Ves

Wysiwyg said:


> *Plus ATO annual supervisory levy* of $388 for June 2014. Levy was $150 when I started so increasing yearly.



It's $259 for 2014, 2015, 2016 and 2017.   You're paying $388 because they changed the payment timing to be upfront rather than in-arrears. The 2013 and 2014 SMSF annual returns are the transition years.

On the 2013 SMSF annual return the levy payable was $321.   $191 related to the 2013FY,  and $130 related to 50% of 2014FY upfront.

On the 2014 SMSF annual return the levy payable is $388 as you said.  $129 is 50% of the $259 2014FY levy that is still owning,  and $259 is 100% of the 2015 levy.

http://www.ato.gov.au/Rates/SMSF-supervisory-levy---2013-to-2016-financial-years/


----------



## Wysiwyg

Ves said:


> It's $259 for 2014, 2015, 2016 and 2017.   *You're paying $388 because they **changed the payment timing to be upfront rather than in-arrears*. The 2013 and 2014 SMSF annual returns are the transition years.



Yes that is why more is paid. If one is caught in this following example then $518 is payable. The $699 ESuperfund yearly cost escalates to $1217 per year. Much more than is mentioned elsewhere.



> Example 3: New fund established on or after 1 July 2013 and not wound up
> 
> XYZ SMSF was established on 28 August 2013. When the fund lodges its first required return, which in this case is the 2014 SAR, *it must pay $518*. This amount is $259 for the 2013-14 financial year plus $259 for the 2014-15 financial year.


----------



## galumay

I am looking into setting up a SMSF and I have been getting some good advice from Jorgon via email, but I dont want to bug him too much until I decide to go ahead and purchase his package.

I will probably have a few questions but first is about bank accounts, I see UBank like most banks offer SMSF accounts, but like the others their interest rates are significantly lower than could be achieved with a normal UBank account. 

I assume that UBank will only let you open an account in the name of the trustee as an SMSF account, is there any way to then access the better interest rates available to their individual customers? ie Use the SMSF as the transaction account for monies into and out of the fund, but be able to invest at better interest rates for the cash portion?


----------



## Bill M

galumay said:


> I assume that UBank will only let you open an account in the name of the trustee as an SMSF account, is there any way to then access the better interest rates available to their individual customers? ie Use the SMSF as the transaction account for monies into and out of the fund, but be able to invest at better interest rates for the cash portion?




I don't think this is possible as they state what the interest rate is for a SMSF on the website. You could call them and ask but I don't think you will get very far.

I'm in a position right now where I am debating where to put my cash. I have 2 options,

1. Get 4.62% from UBank outside of super and pay 19% tax

2. Get 3.96% with UBank with a SMSF and pay 15% tax.

Option 1 wins for me. I really don't know why SMSF's are penalised with interest rates compared to normal accounts.

By the way, the best you can get with ESuperfunds partners is only 3.9% for a 12 Month Term Deposit, all of a sudden UBank is looking good.

http://esuperfund.com.au/smsf-term-deposits/interest-rates.html


----------



## Julia

galumay said:


> I assume that UBank will only let you open an account in the name of the trustee as an SMSF account, is there any way to then access the better interest rates available to their individual customers? ie Use the SMSF as the transaction account for monies into and out of the fund, but be able to invest at better interest rates for the cash portion?



I have no experience with UBank, but have run into the same situation with one of the big four with whom the bulk of my banking exists.
If you have a good personal relationship with your bank then much is possible.

But if you're just accessing UBank as yet another SMSF customer I doubt anything other than what is publicly offered will be available.

FWIW I've found Rabodirect to be great to deal with and to mostly offer competitive rates.
Unless you're planning to keep a substantial amount in a cash a/c the small difference in interest rates really isn't worth stuffing about over imo.


----------



## Panaman

Each time I have saved a bit more cash im adding to the portfolio, also have used personal savings to make after tax contributions, seems to make sense, not that long really before my preservation age so if the worst comes to worst its not like I have to wait decades to access funds and the bank will lend against that if need be im sure.

Added Contango micro cap (CTN) for a bit more exposure to small stocks, my timing on that was accidentally perfect, paid $1 only about 6 weeks ago which is about there recent low and they are now $1-10, also picked up State Street Global dividend ETF (WDIV) for bit more exposure to overseas markets and a good yield which is high on my criteria for choosing funds or ETF,s, also took up my full entitlement to the BKI share offer, so that is now my second biggest holding behind SYI.

Decided to change the Property ETF I was using so sold SLF and Bought Vanguard Property ETF(VAP), one reason was SLF wont allow dividend reinvestment which I didn’t realise, also feel the Vanguard ETF is a bit more robust and diverse, made a profit on the sale and VAP has since done well. 

Only fund that has floundered a bit is CAM but with dividends and if I include the tradeable options entitlement I received its still ahead by the smallest amount, very disappointing that one though but is for the long term and historically it has done well, only stock underwater is WDIV as of Friday but only just, also early days for that so cant expect too much.


----------



## sydboy007

Panaman said:


> Decided to change the Property ETF I was using so sold SLF and Bought Vanguard Property ETF(VAP), one reason was SLF wont allow dividend reinvestment which I didn’t realise, also feel the Vanguard ETF is a bit more robust and diverse, made a profit on the sale and VAP has since done well.
> 
> Only fund that has floundered a bit is CAM but with dividends and if I include the tradeable options entitlement I received its still ahead by the smallest amount, very disappointing that one though but is for the long term and historically it has done well, only stock underwater is WDIV as of Friday but only just, also early days for that so cant expect too much.




I've never liked dividend reinvestment schemes because they make CGT a nightmare as there's multiple share values and you don't have control of the price you pay.  I like the cash so I can decide where my money is invested next.

WDIV has certainly taken a dive recently.  I'm hoping for a decent 10% market fall to jump out of some bonds that have made 13% in the last 12 months and are looking a bit over cooked.  Looking at most corporate bonds I've noticed a clear shift in the market to now believing interest are going to be low for an extended period.  Yields are definitely compressing.


----------



## sydboy007

Seems ETFs are starting to become main stream in Australia

http://www.financialobserver.com.au/articles/etf-market-breaks-through-12-billion

BetaShares managing director Alex Vynokur said the $500 million July rise in FUM should be seen in the context of the total first half 2014 increase of $1.7 billion.


----------



## Panaman

sydboy007 said:


> Seems ETFs are starting to become main stream in Australia
> 
> http://www.financialobserver.com.au/articles/etf-market-breaks-through-12-billion
> 
> BetaShares managing director Alex Vynokur said the $500 million July rise in FUM should be seen in the context of the total first half 2014 increase of $1.7 billion.




Doesn’t surprise me in the least, they really are the way forward when it comes to SMSF and longer term investments, also outperform after fees many of the big fund managers simply by following an index.


----------



## Julia

Panaman said:


> Doesn’t surprise me in the least, they really are the way forward when it comes to SMSF



Why do you say that?   One of the main reasons for establishing a SMSF is to have complete control over how the funds are invested, so I don't see the point in setting it up if all you're going to do is toss the money into some ETF.

A SMSF offers the capacity to quickly switch between asset classes when that's indicated, and to monitor every individual company into which one wants to invest.


----------



## galumay

Julia said:


> Why do you say that?   One of the main reasons for establishing a SMSF is to have complete control over how the funds are invested, so I don't see the point in setting it up if all you're going to do is toss the money into some ETF.
> 
> A SMSF offers the capacity to quickly switch between asset classes when that's indicated, and to monitor every individual company into which one wants to invest.




Very true Julia, also I cant see any point in the huge amount of paperwork and ongoing effort for a SMSF if you are just going to invest in ETF's, plenty of other options to do that without the complication of an SMSF structure.

Having finally completed the setup of my SMSF, I am not sure I would have even done it if I had been fully aware of just how much work was involved!


----------



## Panaman

Julia said:


> Why do you say that?   One of the main reasons for establishing a SMSF is to have complete control over how the funds are invested, so I don't see the point in setting it up if all you're going to do is toss the money into some ETF.
> 
> A SMSF offers the capacity to quickly switch between asset classes when that's indicated, and to monitor every individual company into which one wants to invest.




Not sure why you say that Julia?

With ETF,s I have full control of were my super is invested, I can buy into anything from the Top 20/50/100/200/300 stocks to the entire market or sector specific like financial, mining, high dividend or the small ordinary’s, I can even buy a bear funds if I think the market or sectors will go down, then there are ETF,s on Bonds, currency’s, property and commodities, I want exposure to Agricultural then there is an ETF, I want something specific like Crude oil, gold or Soybeans, there is an ETF, Overseas markets, hedged or unhedged and anything and everything in between all available and tradeable in one easy instant transaction.

ETF,s are very simple, they don’t try and beat the index or commodity there benchmarked too, they simply replicate it at very low cost, no performance fees, no fees for analysts and experts to run the fund just very low management fees for tracking an index and means the average person can get the same exposure to assets that the big funds can.


----------



## Panaman

galumay said:


> Very true Julia, also I cant see any point in the huge amount of paperwork and ongoing effort for a SMSF if you are just going to invest in ETF's, plenty of other options to do that without the complication of an SMSF structure.
> 
> Having finally completed the setup of my SMSF, I am not sure I would have even done it if I had been fully aware of just how much work was involved!





Not sure were all this work to run a SMSF comes from?, from were im sitting, once set up its pretty simple, not much more work or effort from doing my personal tax return, just need to be organised and keep track of things during the year.  

ETF,s if anything makes it simpler, as well as dividend/distribution statements as they occur, you receive an annual statement of what and were distribution came from, makes it very easy.


----------



## sydboy007

Panaman said:


> Not sure were all this work to run a SMSF comes from?, from were im sitting, once set up its pretty simple, not much more work or effort from doing my personal tax return, just need to be organised and keep track of things during the year.
> 
> ETF,s if anything makes it simpler, as well as dividend/distribution statements as they occur, you receive an annual statement of what and were distribution came from, makes it very easy.




I learned after doing my first tax return last year to just scan each dividend notice and annual tax statement for each investment.  Then they're backed up onto my google drive and already to be uploaded to esuper fund as required.  Now I don't have to worry about misplacing one of the statements.

I am starting to think I should maybe start adding to my current holdings than add too many more as I'm closing in on 50 dividend noticed and annual statements to keep a track of.  Thankfully esuperfudn keep a track of the bank account so that's 1 less thing to worry about.


----------



## Junior

sydboy007 said:


> I learned after doing my first tax return last year to just scan each dividend notice and annual tax statement for each investment.  Then they're backed up onto my google drive and already to be uploaded to esuper fund as required.  Now I don't have to worry about misplacing one of the statements.
> 
> I am starting to think I should maybe start adding to my current holdings than add too many more as I'm closing in on 50 dividend noticed and annual statements to keep a track of.  Thankfully esuperfudn keep a track of the bank account so that's 1 less thing to worry about.




You should be able to nominate with the registries to receive Dividend/distribution notices by email instead of mail.  This might speed things up a little bit.


----------



## Panaman

sydboy007 said:


> I learned after doing my first tax return last year to just scan each dividend notice and annual tax statement for each investment.  Then they're backed up onto my google drive and already to be uploaded to esuper fund as required.  Now I don't have to worry about misplacing one of the statements.
> 
> I am starting to think I should maybe start adding to my current holdings than add too many more as I'm closing in on 50 dividend noticed and annual statements to keep a track of.  Thankfully esuperfudn keep a track of the bank account so that's 1 less thing to worry about.





Exactly esuperfund do most of it for you anyway, you just log in to the client portal, verify bank and broker transactions, forward or scan and email statements and its all done for you, just a simple matter of keeping records during the year, its not difficult, complicated or time consuming.

Some people seem to have an issue with only being able to use certain brokers and banks with esuperfund but there all competitive and everything available if using your own accountant is available to you anyway.


----------



## Junior

Panaman said:


> Exactly esuperfund do most of it for you anyway, you just log in to the client portal, verify bank and broker transactions, forward or scan and email statements and its all done for you, just a simple matter of keeping records during the year, its not difficult, complicated or time consuming.
> 
> Some people seem to have an issue with only being able to use certain brokers and banks with esuperfund but there all competitive and everything available if using your own accountant is available to you anyway.




Another service I'm aware of is More Superannuation.  

They allow you to use pretty much any product, and don't force you to use a particular bank or broking account.  Their fees are comparable to eSuperfund.  $650 for fund establishment including Corp Trustee.  Ongoing is around $1,100 per annum deducted in equal monthly instalments.  A little more expensive, but they seem to be more flexible.

I have no affiliation with More, but am using their service with my current employer and have found them to be quick and easy so far.  I'm not a solicitor or SMSF accountant so can't comment re the quality of their compliance docs and audits.


----------



## Julia

galumay said:


> Very true Julia, also I cant see any point in the huge amount of paperwork and ongoing effort for a SMSF if you are just going to invest in ETF's, plenty of other options to do that without the complication of an SMSF structure.
> 
> Having finally completed the setup of my SMSF, I am not sure I would have even done it if I had been fully aware of just how much work was involved!



Hello galumay, I'm sure now that you have the setup completed, you'll soon find the record keeping is little different from what you'd be doing outside of a SMSF.  I know what you mean, however:  about five years ago I just changed from two trustee structure to corporate trustee and the amount of paperwork was far more than I'd anticipated.  

As suggested above, if you electronically file everything as it arrives, ie dividend notices, bank statements etc, end of f/y will be easy.  I also get hard copy of everything sent by post as well:  it doesn't cost me anything and provides a backup should there be electronic failure.
Good luck with it.



Panaman said:


> Not sure why you say that Julia?



I already made it clear in my earlier post.

I'd have thought most people going to the trouble and accepting the responsibility of running their own SF would be doing so with the purpose of having full control and in the belief that they can outperform any index.

If you're content to just accept the performance of an index then that's up to you.  
By selecting individual stocks, some for their growth potential and others for their stability and grossed up yield, it's possible to do a lot better than that.



> ETF,s are very simple, they don’t try and beat the index or commodity there benchmarked too, they simply replicate it at very low cost, no performance fees, no fees for analysts and experts to run the fund just very low management fees for tracking an index and means the average person can get the same exposure to assets that the big funds can.



Sure.   Yes, as I've agreed above, all you're doing is replicating the index and paying a management fee for the privilege.



Panaman said:


> Not sure were all this work to run a SMSF comes from?, from were im sitting, once set up its pretty simple, not much more work or effort from doing my personal tax return, just need to be organised and keep track of things during the year.



That's true, but the penalties for getting it wrong are substantial.  I'll give you an example.
About eight years ago, I'd had all my info to my then accountant a full six months before the tax return for the SMSF had to be lodged.   Six weeks out, not having any indication it was close to completion, I reminded her of the due date.  "No worries, it would all be done in time."   

Two weeks before, following two more queries from me, I'd still not seen anything.  It turned out that she still had not completed the return, let alone sent it off to the auditor.  When I expressed my anxiety about this, she said "oh, don't worry about the audit:  we have an arrangement;  he just signs off on it without seeing it.  It will all be lodged on time".

Obviously it's not acceptable to me that the whole audit process is a sham rather than a reassurance to me of the validity of her work.  Too late to send everything to another accountant.  She refused to negotiate an extension with the ATO, so I had to do this myself.   They were understanding and helpful, but it should never have happened.

The point of this anecdote is not just to describe a thoroughly shonky accountant (about whom I later lodged an official complaint, she was censured and is no longer practising), but to point out that - although I was not at fault in the late lodgement of this return, I am still considered responsible for the fact that it was late.
The ATO could have been less understanding and I could have been significantly penalised.

So I'd just suggest being extremely careful about understanding any changes in legislation or other requirements.   Quite minimal transgressions can render your fund non-compliant and the repercussions are considerable.  For that reason I prefer to use my own accountant who is then also available for any non-super advice throughout the year.


----------



## Julia

Just a question out of curiosity:  if you're using esuperfund or equivalent, what choices do you have if you want some of the fund in cash?  Can you separately negotiate a deposit rate with an institution or are you obliged to take whatever the interest rate happens to be in their cash option?


----------



## galumay

Panaman said:


> Not sure were all this work to run a SMSF comes from?,




Its probably to do with the structure, if you are happy to pay an accountant and a 3rd party service provider it probably is pretty simple, I can assure you setting up a multi member fund (wife and I), with a corporate trustee and opening various bank accounts and stock trading accounts is neither easy or quick!

My point was that if you were ONLY investing in ETF's then setting up an SMSF would seem to me to be uneccessary and time consuming.


----------



## Panaman

Julia

I do get your point about trying to outperform the market by trading individual stocks, but for most people I think they either don’t have the time and/or the know how/experience to research and do that, Also from what I have read more than a few big funds regularly underperform, so if these big funds run by experts and with all the resources available to them often don’t do as well as the broader market indexes, what  chance does the average person have?, sure there will be a few who can but I would guess it’s taken them many years to learn or they have an investment background/job.

All I’m trying to do is get a higher return with fewer fees and feel I am achieving that by using ETF,s, not by a big margin but a few percentage points each year is going to make a big difference at the end of the day, it does take a bit more effort as well both in setting a fund up and keeping track of things but I feel it’s worth it and actually quite enjoy doing it and it really isn’t that hard.

I also get your point about keeping in touch and aware of changes to legislation and what’s required when running a fund and maybe a big advantage to using someone like esuperfund apart from the low costs are that they are also specialists, they do SMSF administration and compliance and that’s it, any changes they let you know and action promptly on your behalf.

With Interest rates the compulsory ANZ account you use for a transaction hub pays 2.5% so on par with most institutions Cash management rate, Current Term deposit rates are in the link.

https://apps.esuperfund.com.au/smsf-term-deposits/interest-rates.html

As to if you can negotiate your own rate I wouldn’t have a clue but I’ve always found esupefund prompt and helpful with any questions so maybe ask them.


----------



## Sir Burr

Julia said:


> Just a question out of curiosity:  if you're using esuperfund or equivalent, what choices do you have if you want some of the fund in cash?  Can you separately negotiate a deposit rate with an institution or are you obliged to take whatever the interest rate happens to be in their cash option?




Julia, you can use who you like if they support SMSF. I've had some term deposits with Ubank.


----------



## Julia

Panaman said:


> With Interest rates the compulsory ANZ account you use for a transaction hub pays 2.5% so on par with most institutions Cash management rate, Current Term deposit rates are in the link.



Thanks.  Endorses my assumption that you can do much better at call elsewhere.



> As to if you can negotiate your own rate I wouldn’t have a clue but I’ve always found esupefund prompt and helpful with any questions so maybe ask them.



Thanks, also, but there's no way in the world I'd switch to them or any other mass provider.



Sir Burr said:


> Julia, you can use who you like if they support SMSF. I've had some term deposits with Ubank.



OK.  The question was specifically about what options are available via esuperfund or any other similar provider, rather than whether any particular banks will offer published interest rates to SMSF.  I've found that just by asking it's quite possible to get much better rates than any that are published as being available to SMSFs.
We might be talking at cross purposes here.


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## galumay

Julia said:


> The question was specifically about what options are available via esuperfund or any other similar provider, rather than whether any particular banks will offer published interest rates to SMSF.




My research when looking into setting up a SMSF was that none of those providers like esuperfund allowed freedom to hold your cash elsewhere. Given that I could get 3.76% with UBank it was a significant factor in deciding to do it all myself.


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## Panaman

Everyone will have different objectives and priority’s when it comes to SMSF, if you need a lot of flexibility to frequently switch your funds as you hunt the current best cash rates or deal then esuperfund and those similar are maybe not for you, if like me you want to establish a long term portfolio of ETF,s and LIC,s and hold little cash then esuperfund is the perfect fit.

Something though for me to bear in mind as I get closer to my retirement (10 to 15 years), I will want to be more conservative by then, so another 8 or 9 years and as I switch to less risky investments and cash then maybe more beneficial to move to a good accountant.

Currently im happy to hold the cash allocation in slightly higher risk vehicle like AYF which invests in hybrid securities, has a yield of 6.4% plus some franking on what I paid for it ($6-30) plus has added a little capital growth through its increased price(now $6-50) and I have about 8% of my super invested in it, only 2% is cash in the ANZ account.

Took the view that growth assets need more time, so used most of my rolled in AMP super to establish a portfolio of ETF,s across Australian/international shares and a smaller allocations into Bond and property ETF,s, employer contributions and salary sacrifice go straight into a low cost managed Vanguard multisector ETF fund that’s 50/50 shares and fixed interest, so eventually this will be my largest holding.

Good luck with whatever your view and strategy is


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## Julia

Panaman, it sounds as though you've been very thoughtful about what will work best for you at this stage.

We all have different objectives and priorities for different reasons.   Hope it all goes well for you and thanks for the discussion.


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## Sir Burr

Julia said:


> OK.  The question was specifically about what options are available via esuperfund or any other similar provider, rather than whether any particular banks will offer published interest rates to SMSF.




I know what you were asking, I wasn't clear. With eSuperfund you can stick your money in ANY bank that will take it and you can get whatever deal you like with another bank.

You do not have to stick to the ones eSuperfund offer.


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## Sir Burr

galumay said:


> My research when looking into setting up a SMSF was that none of those providers like esuperfund allowed freedom to hold your cash elsewhere. Given that I could get 3.76% with UBank it was a significant factor in deciding to do it all myself.




You can stick cash elsewhere but you must open an ANZ account first - ANZ send esuperfund your transactions.

Once you super is in ANZ you can move it where you like.

I use Ubank and have cash and term deposit there.


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## sydboy007

Julia said:


> Just a question out of curiosity:  if you're using esuperfund or equivalent, what choices do you have if you want some of the fund in cash?  Can you separately negotiate a deposit rate with an institution or are you obliged to take whatever the interest rate happens to be in their cash option?




http://esuperfund.com.au/smsf-term-deposits/how-it-works.html

https://apps.esuperfund.com.au/smsf-term-deposits/interest-rates.html

basically using the above means they get the transaction records sent to them so you don't have to worry about that for the auditing process.

They provide a TD service - min 25K - which does the same transaction records direct to them, but there's nothing stopping you from setting up an account with any deposit taking institution - just make sure everything is in the correct SMSF name.

I did this with FIIG when I bought an envestra ILB.

You could sign up with FIIG and they actually have a TD service that will let you know what the best rates are at that time and when your TD is about to mature they will give you the best options available then.  I'd prefer a higher rate of return, but could see that being a good service for those wanting to keep a cash buffer and need a higher return than a high interest savings account.

https://www.fiig.com.au/services/term-deposits/rolling-term-deposit-service


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