Today's Courier Mail included an interesting article within the Money section entitled - 'Uninformed risk losing super savings'.
The article, written by Jason Bryce highlights the risks involved with running your own self managed super fund (SMSF). It focuses on research showing large numbers of SMSF trustees unaware of their obligations and unable to explain important SMSF concepts such as the sole purpose test, investment strategy and restrictions on types of assets that can be acquired from related parties (in-house assets).
The statistic in the article that drew our attention most was the average cost of administering a super fund. For a fund balance of $200,000, the cost of administration was in the range of 2.63% to 3.55% of assets under management for a SMSF. To put this in perspective, the cost of administering a superannuation portfolio we would recommend for an average client with $200,000 in assets would be 1.32% (½ the cost). For this a client would receive administration service, investment management and ongoing financial and investment advice without taking on the extra burden of trustee responsibility.
Self Managed Superannuation Funds are relevant for some but today's article points out that people need to be very careful and seek professional advice before taking this step.