Australians are increasingly taking the reins of their superannuation and opting for the direct and more personalised investment approach that Self-Managed Super Funds (SMSFs) offer. But there’s more to running an SMSF than selecting a few stocks and holding court about their merits to your fellow trustees. If you’re new to running an SMSF, you might be comforted to know that there are experts who can do it for you. And the first person—not just figuratively—that you want in your corner is an accountant who knows how to maintain and restore the health of your super fund under the many guises it can take.
Understanding SMSFs
A private superannuation fund that you control yourself is termed an SMSF and is regulated by the Australian Taxation Office. Up to six members, who are most frequently the trustees, can be part of an SMSF. This means they decide, together or individually, what happens with the money within that fund. And there’s nearly a billion dollars sitting in these funds, which amounts to about 26% of the total amount of money in superannuation altogether.
Regulatory Requirements and Compliance
SMSFs face tough regulatory standards. They need to undergo an annual audit. They are required to report often and to keep very detailed records that we summed up above. And for us, it’s all about maintaining the integrity of the financial statements. So the SMSF accountants keep you on the straight and narrow path of compliance with all these things. And as far as tough regulations go, when it comes to superannuation, there are no two ways about it: either you’re in compliance or you’re not.
Tax Implications and Optimization
It’s essential to handle your investments’ tax implications in an unbelievably skillful way and accounting for tax planning. But when it comes to investor or member retirement accounts (commonly called “superannuation”) in Australia or New Zealand, what does the tax optimization of an investment really mean? An SMSF accountant audit (mostly for superannuation funds) or tax preparation (where an accountant or auditor has some basic knowledge) can help optimize your fund’s (investor or member accounts) tax positions in an unbelievably skillful way. You can find tax traps, where an SMSF auditor or tax preparer can do everything reasonably possible to assist you in avoiding a tax mess.
Managing the Demands of SMSFs
The paperwork and regulatory demands of an SMSF can be tough to keep up with. So an SMSF requires an accountant to take care of these managing tasks, and if they’re good, they’ll keep you as the trustee on track with your obligations. We’re talking here about things like meeting rules and keeping good records of fund operations; but these folks also have a duty to your fund, your money, and you, to make sure nothing goes on in between that could get you into hot water with the ATO (Australian Tax Office).
The Value of an SMSF Accountant
Although there is a price to pay when engaging an SMSF accountant, the potential benefits (in the form of avoided fines, optimised tax outcomes, and payroll efficiencies) can offset this expense. Hiring an accountant can affect real savings and also help avoid the kind of costly mistakes that can put a fund’s financial “health” at risk. Look for an accountant with specific training in superannuation and extensive experience in working with self-managed funds. Experience working with other types of trusts is also another good thing to look for.
Service Scope and Expertise
Verify the service scope. While some accountants might provide all-encompassing services—encompassing not just the core ingredients of financial management but also an overarching vision for their clients’ fiscal futures—others might specialize in a single area of those core competencies. For example, an accountant might focus on tax and compliance, making sure their clients stay on the right side of the law. An in-depth review of who you’re dealing with and their relative merits is essential.
Conclusion
A self-managed super fund (SMSF) accountant is a great asset for anyone who manages their own retirement savings. This kind of expertise helps to comply with the legal requirements of having a self-managed superannuation fund. Their specialist knowledge can also assist in making good financial decisions that secure your retirement. Engaging these professionals certainly costs, but in our experience, their fees can be recouped through better tax planning and better investment decisions. We asked three experienced SMSF accountants to describe the sorts of benefits their clients achieve.
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