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Self-Manager Superannuation Fund

Need help with managing and setting up your Self- Manager Superannuation Fund?

SMSF

Like other superannuation (super) funds, self-managed super funds (SMSFs) are a way of saving for your retirement. The difference between an SMSF and other types of funds is that, generally, the members of an SMSF are also the trustees. This means the members of the SMSF run it for their own benefit.

You can set up your own private super fund and manage it yourself, but only under strict rules regulated by the Australian Taxation Office (ATO).

An SMSF can have between one to four members. Each member is a trustee (or director if there is a corporate trustee). Running your own fund is complex.  Our expert advisers can make this complex process simple for you.

When you run your own SMSF you must:

  • Carry out the role of trustee or director, which imposes important legal duties on you.
  • Use the money only to provide retirement benefits.
  • Set and follow an investment strategy that ensures the fund is likely to meet your retirement needs, but make sure it is updated as rules and regulations change.
  • Other changes will occur if children are added or a member dies.
  • Keep comprehensive records and arrange an annual audit by an approved SMSF auditor

If you want the flexibility of an SMSF, but not the worry then we at Wealth Plus have the expert staff to assist you to set up your SMSF to ensure that you meet all of the legal obligations and your SMSF is doing what you want it to do, to ensure you have financial security when you retire.

Important Links as a SMSF is controlled by the following entities:

  • Superannuation Industry Supervision (SIS) Act

http://www.austlii.edu.au/au/legis/cth/consol_reg/sir1994582/

  • The Trust Deed

http://www.ato.gov.au/Super/Self-managed-super-funds/Setting-up-an-SMSF/Step-5–Create-your-trust-and-trust-deed/

  • Corporations Act –

http://www.comlaw.gov.au/Details/C2013C00003

  • The ATO

http://www.ato.gov.au/Super/Self-managed-super-funds/

Contact us today and let us unravel the complexities of setting up your SMSF.

Who Pays Your ‘Free’ Mortgage Broker?

There’s no such thing as a free lunch, but that doesn’t mean you will receive lower levels of service or expertise from a credit adviser who doesn’t charge you. It just means that someone else is paying for it. Each business will have its own reasons for its revenue model, and each structure offers different advantages.

Approximately 90 per cent of the more than 10,000 MFAA accredited finance brokers don’t charge a fee for their advice, relying on lender commissions for their income. Others rate their intellectual property as a service worth paying for upfront.

As part of the majority, Mortgage Choice has never once charged a client an engagement fee in 23 years of business. Jessica Darnbrough, Head of Corporate Affairs, says that, while she can understand why some people have introduced a fee-for-service structure to cover costs even when a client takes their business elsewhere, recent survey results reveal that it’s not something Mortgage Choice’s borrowers would agree to take on at this stage.

“It’s a tricky thing to introduce, and those who do tend to be independent players,” she says.

“But the truth is, buyers do shop around these days and brokers can end up doing a lot of work and not getting paid for it, especially since the introduction of the National Consumer Credit Protection Act 2009 – that prompted a lot of brokers to start charging. So, we might very well see an increased level of brokers charging in the future.”

Robinson Sewell Partners (RSP) has done just that. After several years in business, agribusiness finance specialist RSP recently introduced a fee-for-service model that allowed it to help clients even when it would not make business sense to do so if the only income would be commission. It also allowed RSP to assign a clear value to its services and the experience in its team.

“It’s been a learning curve, but we realised that trying to engage clients without charging any fee, and just relying on the back end of success, really undermined how we evaluate our propositions,” says Director, Ian Robinson.

Clients have been increasingly committed to the process because they wanted to guarantee a return on their investment and, contrary to the Mortgage Choice experience, the company saw little debate about the new fee structure.

“We value our intellectual property very highly. We’ve been in the trenches with the banks for years and we understand the internal mechanics – this is very powerful information to have when we’re operating on the client’s side.”

A clear advantage of seeing a fee-for-service adviser is having someone onside who isn’t worried about the volume of your business. They are paid to do a job for you, and they do that whether your loan is $200,000 or $2 million.

The main and very obvious advantage of seeing a credit adviser who does not charge a fee is that it lowers the cost of procuring finance and, despite public debate, the different commission structures offered by the various lenders do not impact the credit adviser’s recommendations.

Not only are MFAA accredited finance brokers bound by ethics agreements that demand they do not suggest loan products that are unsuitable for a client, an adviser who prioritised commissions over their clients would see their business suffer as clients realised that they would get a better deal elsewhere.

Whether you choose an adviser who charges fees or one who relies on commission, MFAA accredited finance brokers are bound by ethical standards requiring them to give you appropriate advice.

 

Budget a ‘good news’ story for SMSFs

It is looking good for now with SMSF Lending.

After speculation that super tax concessions would be on the chopping block, this year’s federal Budget has proven to be good news for the SMSF sector.

The federal government kept its pre-election promise by not making any detrimental changes to superannuation in its first term.

“I think this shows that we have some stability in superannuation at the moment when it comes to tax and regulatory changes,” the SMSF Association’s senior manager for technical and policy, Jordan George, told SMSF Adviser.

Mr George noted that limited recourse borrowing arrangements (LRBAs) were not touched on, despite some speculation the government would use the Budget to address the Financial System Inquiry’s recommendation to ban borrowing in super.

Also speaking to SMSF Adviser, Taxpayers Australia’s head of superannuation, Reece Agland, said that while superannuation was a “no-show” in this year’s Budget, changes will be on the cards as the next federal election approaches.

“At least they’re not tinkering with super to fill budget gaps, so that’s a positive. In that sense, no news is good news for the super sector,” Mr Agland said.