How to run your own successful Super Fund

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?

Panaman said:

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

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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.

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.

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?

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

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.

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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.

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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.

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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.

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.

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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.

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

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.

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.

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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.

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.

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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.

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?

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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