Tue 22 May, 2018
What are the costs of starting a Squirrel SMSF?
So you’re thinking of starting an SMSF. That’s awesome! For many people like you, taking control of your finances and the investment strategy of your super is a practical, logical and exciting decision.
As you’re definitely aware, starting an SMSF is not for everyone. There are many responsibilities for starting an SMSF, alongside the dozens of benefits. We’ve outlined more about what’s involved in starting an SMSF and the investments you can make here in our complete guide (tap the link to read later!)
But obviously a key consideration will be the cost of running your SMSF.
The truth is, that the costs of starting an SMSF vary depending on who you choose to administer your fund, as each company or (traditionally) accountant will have differing rates for their services.
There are in fact, many head-ache inducing ways an SMSF can be setup, ranging from whether it’s an individual or corporate trustee structure, to the number of investments you choose to make or if one of your investments is property.
Here’s a breakdown of what the costs of a Squirrel SMSF include:
For ultimate transparency, we only have two fees: our setup fee and our ongoing admin fee. Both of these are flat-rate, all inclusive fees that are the same for everybody, no matter how much you have in your super.
The Squirrel Setup Fee
Our sign up fee is $3,171.05 (inc GST) which can be deducted from your SMSF cash account. This includes:
- Establishment and registration of SMSF Trust
- Establishment and registration of Special Purpose Corporate Trustee Company
- Establishment of SMSF governing rules
- Establishment and registration of investment strategy
- Submission of “Election to be regulated” Compliance statement
- Establishment of accounts with service providers
- Set up of Bare Trust and Bare trustee when required for the purchase of property
Additional services we provide at no extra cost to you include:
- Registration with Australian Tax Office
- Rollover of other superannuation funds into SMSF
You may find other providers that have a cheaper looking setup fee. But when you’re actually analysing the comparable rate of our setup fee and all the services we include compared to how other SMSF companies structure their fees, you’ll notice that we have one of the best rates on the market.
The Squirrel Admin Fee
We then have an annual admin fee, which is $121 per month (inc GST) deducted from your SMSF cash account. This includes:
- Annual compliance, administration and accounting of SMSF
- Annual return of Special Purpose Company
- 24/7 access to Squirrel online SMSF management portal
- Business hour access to Squirrel technical experts
- Fixed fee for 1 – 4 members and any number / value of assets
The only extra cost that will be deducted from your SMSF is the $259 ATO supervisory levy at the time we lodge your tax return. This fee is not part of our control and is decided by the ATO.
How do we keep our costs low?
We want to keep our costs as simple as possible, so that more people are able to access the freedom of running an SMSF. We have often been asked why our costs are so low compared to other providers and the answer is pretty simple too.
Our technology and streamlined customer service has allowed us to keep our costs to a minimum for you. We are also making further advancements to our platform to add more value to your experience as a Squirrel customer.
As we don’t offer financial advice, this is another area where costs are reduced for you.
Do our costs change with your balance?
With most industry funds and SMSF providers, the costs of running the SMSF are charged on a % fee basis. That means they’ll typically charge between 1-2% of the value of your fund.
That’s not so bad when you have less than $100,000 or so, but as your investment start to gain traction and the magic of compound interest begins, your super balance will very quickly begin to cost you a lot of money on a % fee basis. For context, a $500,000 super fund (half of what you’re recommended to have as a balance for retirement) will cost between $5,000- $10,000 per year.
With Squirrel, our admin fee is a flat-rate fee. So no matter how much your balance grows, you will not be charged more in line with that. When you have $200,000 or more, this really starts to benefit you.
Still have questions?
If you want to chat through our fee structure and everything that’s included, then feel free to call our team on 02 8823 7999
Or you can ask your question on our contact form here.