Self managed super - what are the costs?

[visual]

Duckman,
you are absolutely correct ,however Macca also has a point,well illustrated by Peter Lynch,in his beating the street book.(in the end though accountants like doctors have to be taken on trust,unless you yourself know something about accounting and can tell how well they are doing their job,in which case you wouldnt need them anyway,unless you were extremely busy)
I hasten to add the book is about investing not about accountants,but
Excellent book too by the way :

 

[Prospector]

Thanks for that Duckman - I agree with the cheapies issue, however I really think our accountant is seriously overcharging, and challenged them on this recently - actually refused to pay their bill and sent only half! I based this on the number of hours I estimated it would take, added a few more, at a rate of $250 per hour plus GST. Thought this was more than generous

 

[bullmarket]

I have found this ASX web page that has some general information and links to other sites related to SMSF's in general that might help someone.

cheers

bullmarket

 

[Duckman#72]

Thanks for that Duckman - I agree with the cheapies issue, however I really think our accountant is seriously overcharging, and challenged them on this recently - actually refused to pay their bill and sent only half! I based this on the number of hours I estimated it would take, added a few more, at a rate of $250 per hour plus GST. Thought this was more than generous

No problem Prospector - and I wasn't having a go at you concerning the questioning of your fee. You seem to have a realistic idea on what are reasonable chargeable rates and the time involved to complete your job. A lot of people pluck what fee they think they should be paying out of the air - not basing it on anything. "My mate got his done for $1200 - and mine should be less than his" sort of stuff.

 

[macca]

Hi Duckman,

I can only assume you are in the industry.

Never thought to look for one in a tent, I am quite happy to use one with a nice and tidy office, competent, well presented staff who can direct me to the appropriate link at the ATO if questioned. They also give me printouts of the latest changes from the ATO if applicable to me.

As I said, he uses the same software as the previous guy, if he as a Chartered Accountant, with links to a national and international group of Chartered Accountants, puts in garbage, then I have the same chance that the last guy could also put in garbage, don't I ?

I don't do any of the Tax return myself, I simply print out a summary of my trades from Commsec, copy all my term deposit and bank account stuff and give it to them.

I only object to paying $175 for them to PRINT the trustee company annual return, I still have to fill it in anyway, so why not print it myself ?

As previously stated, I do not draw a pension so it is pretty simple if you have the right software, but I have no doubt that to purchase the software and keep it up to date would cost a few $$$$

About that engagement letter, yes we have to sign one of those, quite detailed aren't they.

Anyway, that's my situation.

 

[Duckman#72]

Never thought to look for one in a tent, I am quite happy to use one with a nice and tidy office, competent, well presented staff who can direct me to the appropriate link at the ATO if questioned. They also give me printouts of the latest changes from the ATO if applicable to me.

As I said, he uses the same software as the previous guy, if he as a Chartered Accountant, with links to a national and international group of Chartered Accountants, puts in garbage, then I have the same chance that the last guy could also put in garbage, don't I ?

I don't do any of the Tax return myself, I simply print out a summary of my trades from Commsec, copy all my term deposit and bank account stuff and give it to them.

I only object to paying $175 for them to PRINT the trustee company annual return, I still have to fill it in anyway, so why not print it myself ?

As previously stated, I do not draw a pension so it is pretty simple if you have the right software, but I have no doubt that to purchase the software and keep it up to date would cost a few $$$$

About that engagement letter, yes we have to sign one of those, quite detailed aren't they.

Come on Macca - you can get your accounting fee down lower than $600! Don't tell me you use someone that actually has links with the ATO. That sort of thing seems lavishly, wasteful to the extreme. How extravagant.

But seriously - why are you asking your accountant to direct you to the appropriate sites at the ATO? Most accountants would be giving you the advice both verbal and written themselves. Or are you cost cutting again?

And I'm curious - why is your engagement letter so long? I am learning all the time from people on this forum such as yourself and Sails that "all the work has been done" and "he just presses the PRINT button", and "it's pretty simple if you have the software". What do these people that masqerade as accountants actually do!!! There can't be anything left to put into the engagement letter.

I will do some more research on this Macca and get back to you. In the meantime - don't let your accountant's secretarial staff get new uniforms - or you'll be up to $620 next year.

Duckman

 

[macca]

Hi Duckman,

Not quite sure why you are being so sarcastic.

I simply responded to a question by another poster and you seem to take it as a personal insult.

This is a public forum where we come to share our experiences on topics of mutual interest, if I can help other posters then I will.

My advice was given in an effort to help those considering a SMSF realise that, as in most things, it is wise to get a comparison price.

I now understand why Tech/A feels as he does

 

[Duckman#72]

Hi Duckman,

Not quite sure why you are being so sarcastic.

My advice was given in an effort to help those considering a SMSF realise that, as in most things, it is wise to get a comparison price.

I now understand why Tech/A feels as he does

Just playing devil's advocate Macca. Sorry.

The general tone of this thread started out warning those looking to start a SMSF to be wary as the costs (in general) are more than people anticipate and realise. Then the thread seemed to turn around to suggest how easy it is and how cheap it can be.

Duckman

 

[Julia]

I agree re note of caution before establishing a SMSF. I'm really happy with mine, but have been a little surprised at the suggestions in this thread of setting one up with anything under $200K.

Also, don't underestimate the work involved in running a Fund.

Good luck to anyone who decides to do it, but please don't think: "whoop de do - if I stop paying fees to a Super Fund manager and have my own fund, then I'm on a quick path to endless success". Just remember that YOU have to take responsibility for everything to do with the Fund, including fulfilling your obligations as far as the ATO and ASIC are concerned.

Julia

 

[Julia]

I'm in somewhat of a state of shock to have received the accountant's and auditor's bill today - total of $3200! I was expecting around $2000 based on last year's charge .

Has anyone else had their accounts recently? The auditor alone was $464.

I've since phoned another couple of accountants who have said "probably around $2000" and am seeing one tomorrow with the current statements in order to get a firm quote.

And there's the ATO levy of $45 on top of that!

Would appreciate others' comments.

Julia

 

[Prospector]

Hi Julia

I paid almost exactly that for my accountant's SMSF bill this year. My return consisted of approx 35 trades (buys and sells), dividends, costs associated with having a block of land (eg paying for water, sewerage, fences etc), and two banking accounts. This included the Audit fees which weren't separated out because the Accountant practice is allowed to do this 'in-house'.

All my accounts were reconciled thru MYOB, and each dividend and trade was documented in my software designed to keep track of shares. All printed out for them.

How does this compare with the complexity of your fund?

 

[Julia]

Hi Prospector,

Probably all up, about the same, in that I don't have any land with its associated financial activity, but you have obviously done more to help the accountant than I had, with your MYOB work. No. of trades would probably be between 40 and 50, and dividends for about 25 - 28 companies for most of the period. Two bank accounts.

I'm seeing another accountant tomorrow with all this year's paperwork so he can give me his quote for doing the same work.. Will keep you posted.

Julia

 

[Prospector]

HI Julia
Nice to see someone else who trades the same amount as I did! My accountant scoffed at the number of trades I had done - 'never seen as many in all my life' - arrogant Y^%$er! Obviously he knows nothing about shares and maximising profits/loss! He probably still holds the shares he bought when he was 20!

Am trying to change but suffering from lack of inertia - plus I have to get all the Trust deeds off him if I do change!

Good luck with it all!

 

[macca]

Hi Prospector,

If you wish to change accountants, you shop around to find one that you feel comfortable with.

Then THEY contact your old acct and ask for the paperwork to be sent to them direct.

No need to have a face to face situation with them

 

[Prospector]

That's what I thought too Macca - the one I was referred to by someone else insisted that I get all the documents myself - I think accountants have become the new stock brokers - they get too much business, can charge too much and then blaming it on the complexity of the Taxation system, GST etc etc, and can be just,. well, lazy!


I bet they are a bit cross with the new super rules after the age of 60 - because now people just wont need an accountant to deal with all the draw down rules that used to apply - ha ha!

 

[Duckman#72]

I bet they are a bit cross with the new super rules after the age of 60 - because now people just wont need an accountant to deal with all the draw down rules that used to apply - ha ha!

Hi Prospector

I think it would be the opposite actually - the Government have opened the floodgates for more people to start their own self managed super funds.

Even at $3000 for acounting and audit fees per annum - on a fund with assets of $250,000, a self managed fund is still the cheaper option over the majority of off the shelf packages. It is just that it gets up the nose of SMSF trustees that there is an invoice for the amount - whereas in an off the shelf product it can be lost and absorbed without seeing a cheque written out for it.

Duckman

 

[Julia]

Today I took all the paperwork which precipitated the bill for $3200 into another accountant. He uses the exact same software, and quoted in writing that his bill for the same work would have been $2200 max, i.e. $1000 less!

Also, he is happy to get onto the tax return immediately after 31 June whereas the present accountant wouldn't accept the material until February this year which meant I was holding onto two lots of everything for three quarters of the year.



Julia

 

[chemist]

...Also, he is happy to get onto the tax return immediately after 31 June ...

Sounds good but beware, 31 June could be a long time coming.

cheers,
Chemist

 

[Julia]

Sounds good but beware, 31 June could be a long time coming.

cheers,
Chemist

Hello Chemist,

And would you believe I read your comment and thought for a couple of seconds "what on earth is chemist on about"! Then woke up. I think I get it wrong every year and have no idea why.

Thanks

Julia

 

[Prospector]

Hi Prospector

I think it would be the opposite actually - the Government have opened the floodgates for more people to start their own self managed super funds.

Duckman

Hmm, hadnt thought of that! My goodness, that is also rather scary that suddenly a lot of dare I say, uninformed people might suddenly want control of a heck of a lot of money on the advice of accountants who may or may not have their 'clients' best interests at heart - particularly as I do believe their fees for Super Funds in the drawdown phase will dry up! Can you imagine how the compliance Department in the ATO will need to be beefed up to ensure all Fund Trustees are doing the right thing!