New cost data makes impact

SMSF cost data

The most recent study into SMSF costs is already having an effect on sector information provided by government agencies.

The SMSF Association has revealed sector research released in November last year regarding the cost-effectiveness of SMSFs has already had an impact with government agencies such as the Australian Securities and Investments Commission (ASIC) taking note of the data.

The study, performed by Rice Warner, commissioned by the SMSF Association and sponsored by SuperConcepts, showed SMSFs with a balance of $200,000 are cost-competitive with large public offer funds.

“We’ve had both direct discussion with them and exchanges in public where either ourselves or others have raised the same question [about whether the new data has made a difference]. I think ASIC was asked three times in parliamentary committees as to why they were publishing material that didn’t seem to be all that appropriate and relevant,” SMSF Association John Maroney said during a media roundtable conducted today.

The figures also indicated the annual cost of running an SMSF in accumulation phase is likely to be below $3090, which is significantly lower than the estimated amount of $13,900 previously published in an ASIC factsheet.

“The $13,900 figure, that’s now marked as expired. We have asked them to remove it from their website, [but they] said their practice is to keep the history there so people can see [it]. But if you go and download it now, it has a big red box on there saying this information has expired,” Maroney noted.

Further, he observed the corporate regulator had made other changes to its information channels to better reflect the results of the Rice Warner findings.

“The operating costs on their Moneysmart website, which effectively is the living version of what was in that factsheet, they’re down to the median figure, which is the $3900 mark. They still quote averages in there, but at least they have got figures that are focused on median operating cost, which is a much more relevant figure,” he noted.

He acknowledged there was still work to do to ensure government agencies publish more accurate and indicative SMSF data, but was confident these organisations now had an understanding that more detailed analysis is required for proper cost comparisons.

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