With superannuation moving to a cloud-based online environment, low-cost administrators have entered the market. On the surface, a good deal, restrictions and hidden costs could put you and your fund at serious risk.
An SMSF managed by an administrator is an attractive option for busy people who wish to have some control of their super. A good administrator will not only lighten the workload on trustees but will also achieve a better retirement outcome. Conversely, the wrong administrator can cost you thousands of dollars in tax penalties or lost investment opportunities.
A decline in return on investment in recent years has forced many SMSF trustees to review their administration costs. If you are thinking of changing your administrator to a lower-cost provider, it’s essential you thoroughly understand what your provider is offering. Failure to do so could significantly reduce your funds when you retire. Your primary objective in managing your SMSF is to provide for your retirement. This must also be the objective of your fund’s administrator.
Choosing an SMSF administrator
To minimise your risk as trustee, ensure your SMSF administrator will allow you to:
- Diversify your fund’s investments
- Ask questions and discuss options
- Arrange a face-to-face meeting if necessary
- Regularly review the fund’s compliance.