ASIC research shows SMSF costs lower
The Australian Securities and Investments Commission (ASIC) may need to revise the $200,000 figure it placed on the success of self-managed super fund (SMSF) starters after conducting research on current costs.
ASIC Commissioner Greg Tanzer said competition had created cheaper SMSF products and services, and indications from its research showed the cost of running an SMSF had decreased below the figure it published five years ago.
"We're refreshing this research at the moment because we see this as a key area, and we're going to be looking hard at advice given to people to move into an SMSF… and interestingly some of the research is suggesting that maybe that figure is a little bit lower these days," he said.
ASIC's current surveillance of financial planners and the advice given to people about SMSFs includes standard tick-boxes such as fact finders and the suitability of asset allocation to a member's aspirations, according to Tanzer.
"We're also trying to look at the quality and nature of advice that's given and how that matches up with the investors' instructions, the aspirations or the appetite that investors have put forward," he said.
Geoff Peck, managing director - individual customers, Russell Investments said focusing on an SMSF starter's level of assets "missed the point".
"Technology will drive the break-even cost down to negligible.
"Once you've got bottom-line administration and e-trade and various other things, if you cobble that together you can quite reasonably think you could break even on these things," he said.
Peck said super funds' advantage lay in pooling compliance issues. He said the real worry about SMSFs was the lack of protection for disengaged members - spouses and "other" members.
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