When exiting an SMSF might make sense

People should be considering the appropriateness of maintaining an self-managed superannuation fund (SMSF) if they have assets under $500,000 and are simply invested in a diversified portfolio similar to an industry or retail fund.
This may be even more the case if they have experienced employment disruption.
That is the assessment of Creation Wealth senior financial planner, Andrew Zbik who has pointed to Australian Securities and Investments Commission (ASIC) research that shows that SMSFGs with assets beneath $500,000 may have lower returns after expenses and tax compared to industry or retail funds.
While acknowledging that SMSFs could provide additional strategies not available in an industry or retail fund such as borrowing money and purchasing residential or commercial investment property, people needed to consider what their objectives really were.
“If your SMSF strategy is not using one of the above options and is simply invested in a diversified portfolio similar to what can be offered in an industry or retail superannuation fund, there may be a point in time to reconsider if an SMSF is still the appropriate structure to manage your superannuation if your assets are under $500,000 and it looks like you won’t be able to contribute further to your SMSF for a number of years,” he said.
Zbik said the cost of maintaining a SMSF was, in his experience, generally as follows:
Between $1,500 to $2,000 per annum for accounting fees to complete an SMSF tax return and financial statements
Between $250 to $500 for an SMSF audit
ATO supervisory levy of $259
ASIC annual filing fee of $273.
“Thus, the cost of compliance for an SMSF varies between $2,282 and $3,032. In some instances, this can be even higher,” Zbik said.
“Fees are not the only factor to consider when determining which superannuation fund structure may be appropriate for your needs. However, if you are using an investment strategy that is very similar to what can be offered in an industry or retail superannuation fund, there may be a point in time to accept that you are not using the ‘additional’ features an SMSF can provide,” he said.
“Therefore, it may be appropriate to wind-up your SMSF and rollover your superannuation to an industry or retail fund.”
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