High SMSF accountant's fee

Julia said:

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

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

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

Intrinsic Value said:

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

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

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

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

TikoMike said:

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

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

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

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

It is a few hours work that is about it.

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

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

Intrinsic Value said:

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

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

It is a few hours work that is about it.

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

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

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

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

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

TikoMike said:

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

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

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

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

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

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

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

TikoMike said:

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

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

Julia said:

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

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

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

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

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

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

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

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

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

Ves said:

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

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I like my accountant.

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

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

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

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

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

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

Intrinsic Value said:

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

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

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

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

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

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

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

TikoMike said:

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

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

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

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

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

Simple as that.

Intrinsic Value said:

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

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

Simple as that.

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

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

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

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

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

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

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


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

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

RogueTrader273 said:

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

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

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

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

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

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

Julia said:

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

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

Julia said:

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

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

Julia said:

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

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

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

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

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

RogueTrader273 said:

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

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

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

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

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

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

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

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