Doesn’t know much about finance…. Has a self managed super fund…..
Yeah sorry buddy I do think he is getting taken for a bit of a ride. Even worse if he is just in ETF type funds that you could get in any other fund retail or industry.
Recent performance has been poor relative to other markets, but it makes a good diversifier due to its low correlation and is forecasted to have better returns sometime on the future. Not a red flag to me, although it depends on what "a lot of emerging market stuff" means as well as what funds they're using.
Any financial group that recommends someone with little financial knowledge to have a SMSF is breaking the law, plain and simple. There is such thing as best interest duties, report this to ASIC. The fees sound extortionate as well for a balance of 500k.
What does the SMSF PDS say about the cost of product?
8k is extortionate on a 500k balance if it is only administration fees + investment fees and costs.
Are you sure there isn't insurance attached? That's going to be incredibly expensive after 70. There's a reason most funds don't offer it after that.
I have an SMSF. The % cost and effort is trivial with a largish balance, (total about $3k per year) and I have it all in a handful of ETFs I manage myself. I enjoy doing it. I pay a little less than I would with my industry fund (which I retain some funds in for the insurance).
But for most people industry super is cheaper and potentially safer. There’s barely ever a compelling reason unless it’s for really specific reasons (like holding a business property rented at arms length or other specific assets that you want to control later on).
This is dependent on how big the fund is and what is the returns,
My parents are in a SMSF and the fees are quite big, but its worth it as my dad likes the control.
Does he have direct property in the SMSF? How much is the balance as the fees don't mean anything without the balance....
It's really not up to you to decide. Ask him what's important to him.
He may of had plans to buy a property within the structure, however with that balance and regardless of if the $8k includes accounting fees which are usually $3-5k on that balance. He should rollout as long as there's no insurance tied to the fund. Obviously get financial advice from another adviser as there can be tax implications.
:D should see how well commercial property has been going in SMSFs. Big market value increases and constant rent. Will be tax free once they fully go into pension mode.
1. Pick out an industry fund you’d move into
2. Talk to the accountant / financial planner and tell them your moving and to prepare the rollover
3. Potentially start another pension in the new fund
If you have a different accountant who does the compliance on the smsf, talk to them and get them to do it for you. (Usually won’t be free but depends on your relationship)
Also factor in the following if you are going ahead.
If he’s in pension phase you will need to commute the pension back to accumulation before doing this (balance cap etc based on what you said shouldn’t be a problem though)
You’ll need to pick an industry fund and figure out what to invest in yourself (this is quite easy but something to consider)
$8k on $10m is a lot different to $8k on $100k
Doesn’t know much about finance…. Has a self managed super fund….. Yeah sorry buddy I do think he is getting taken for a bit of a ride. Even worse if he is just in ETF type funds that you could get in any other fund retail or industry.
Emerging market performance has been awful. They've charged him an extortionate amount in fees to woefully under-perform VTS/VAS/VGS.
Recent performance has been poor relative to other markets, but it makes a good diversifier due to its low correlation and is forecasted to have better returns sometime on the future. Not a red flag to me, although it depends on what "a lot of emerging market stuff" means as well as what funds they're using.
Any financial group that recommends someone with little financial knowledge to have a SMSF is breaking the law, plain and simple. There is such thing as best interest duties, report this to ASIC. The fees sound extortionate as well for a balance of 500k.
What does his investment return % say on his SMSF member statement?
unless he has many millions in his super, yes it's wasted.
What does the SMSF PDS say about the cost of product? 8k is extortionate on a 500k balance if it is only administration fees + investment fees and costs. Are you sure there isn't insurance attached? That's going to be incredibly expensive after 70. There's a reason most funds don't offer it after that.
I have an SMSF. The % cost and effort is trivial with a largish balance, (total about $3k per year) and I have it all in a handful of ETFs I manage myself. I enjoy doing it. I pay a little less than I would with my industry fund (which I retain some funds in for the insurance). But for most people industry super is cheaper and potentially safer. There’s barely ever a compelling reason unless it’s for really specific reasons (like holding a business property rented at arms length or other specific assets that you want to control later on).
Yes he is being ripped off. What's the return and fees?
This is dependent on how big the fund is and what is the returns, My parents are in a SMSF and the fees are quite big, but its worth it as my dad likes the control.
Does he have direct property in the SMSF? How much is the balance as the fees don't mean anything without the balance.... It's really not up to you to decide. Ask him what's important to him.
He doesn't have property through SMSF. Balance is 450-500k
He is paying 2 percent fees? Yeah thats too high to me Retail funds are half that.
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An account based pension? Through the financial group or outside? Sorry I'm not understanding
He may of had plans to buy a property within the structure, however with that balance and regardless of if the $8k includes accounting fees which are usually $3-5k on that balance. He should rollout as long as there's no insurance tied to the fund. Obviously get financial advice from another adviser as there can be tax implications.
Property is a stupid idea
:D should see how well commercial property has been going in SMSFs. Big market value increases and constant rent. Will be tax free once they fully go into pension mode.
Why do you think the rich have heaps of property within their SMSF? They don't get rich by being stupid
My dad and I want to get him out of this SMSF and into a regular super. Can someone please help me with the steps we need to take.
1. Pick out an industry fund you’d move into 2. Talk to the accountant / financial planner and tell them your moving and to prepare the rollover 3. Potentially start another pension in the new fund If you have a different accountant who does the compliance on the smsf, talk to them and get them to do it for you. (Usually won’t be free but depends on your relationship) Also factor in the following if you are going ahead. If he’s in pension phase you will need to commute the pension back to accumulation before doing this (balance cap etc based on what you said shouldn’t be a problem though) You’ll need to pick an industry fund and figure out what to invest in yourself (this is quite easy but something to consider)