Accountants make more money than SMSFs
According to a recent survey of older Australians, a third with self-managed superannuation funds (SMSFs) claim their accountant makes more money than their fund does.
When REST Industry Super surveyed Australians aged over 50, it found that older people have reservations about self-managed funds as a savings model, with a quarter of those with an SMSF saying they would not have started one if they had known how much work was involved. They typically said they wished they hadn't done so - and 8% of them said they intended to close their fund.
"This suggests self-managed super funds aren't appropriate for everyone. The cost to maintain an SMSF, both financially and in terms of time, is significant and usually more than what people think," says Damian Hill, CEO of REST.
The survey also found that those with an SMSF are more likely to be relying on the equity in their home to fund their retirement - some 46% versus 38% for those without an SMSF.
So how much do SMSFs pay their accountants?
The tax office does not have statistics on what SMSFs spend specifically on accounting services but in their annual returns SMSFs report the amount of "management and administration" expenses they incurred for the year. This includes, among other things, fees incurred in establishing the SMSF, tax agent fees, accounting fees and other expenses in managing the fund. The 465,946 SMSFs that lodged a 2013-14 annual return reported a total of about $1.68 billion in management and administration expenses, which equates to an average of about $3600.
The annual return does include a label intended to separately capture the amount of audit fees paid by an SMSF. In the 2013-14 income year, and based on those SMSFs that included an amount for audit fees in their return, the average was $714 and the median amount was $550.