Andrea Slattery
The SMSF Professionals’ Association of Australia (SPAA) has questioned the cost findings of the actuarial firm Rice Warner in its submission to ASIC on Consultation Paper CP216.
The SPAA submission, which outlined its stance on the disclosure of costs associated with the operation of an SMSF, said SPAA “was surprised by the report’s findings on when SMSFs are cost-competitive with retail or industry funds”.
SPAA CEO Andrea Slattery said: “The report showed higher costs than what we understand to be prevalent in the SMSF administration market.
“These higher costs led to higher break-even points for SMSF balances to be cost-competitive which might be misleading to trustees. Because of this we do not think that these calculated break-even points should be used as being indicative of the costs of running an SMSF. The most common cost, such as the median or most common cost, could be used as a more useful guide.
“Also, the calculated break-even points ignore the very unique and individual nature of SMSFs. Costs often depend on the SMSF’s investments, the trustee’s level of self-administration and what type of administration platform they use.”
“Once again, we believe that this issue on costs can be resolved by trustees having access to advisers with better knowledge and understanding of SMSFs so they can have a meaningful discussion on how having an SMSF will fit their individual circumstances.”
