Administration fees
Administration fees are the costs of professional services and structure management required to maintain your investment portfolio. These include accounting services, SMSF administration, trust administration, and other compliance-related costs.
While these fees are necessary for proper compliance and management, the probe is people are oftne charged more than the service is work, or it is bundled with advice or management services which are not needed.
Some servieces are a regulated requirement, like an SMSF audit, but there are many services that are not regulated and can be done yourself for free.
SMSF administration
Self-Managed Superannuation Funds require ongoing administration to maintain compliance with ATO requirements. This includes annual audits, financial statements, and regulatory reporting.
In the past SMSF administration could cost over $30,000 per year, charging for audit, platform, advice, management, and brokerage fees. Some managers get a commission from each brokerage transaction or training fees, so would actively trade more shares to boost their fees.
Now with the advent of automated platforms and online services, it can be done for under $1,500 per year.
Accounting Services
Accounting is essential for tax compliance and financial reporting. In the past accounting could cost over $3,000 per year, but now with the advent of automated platforms and online services, it can be done for under $1,000 per year.
Accounting at the end of the day is a calculation and set of rules which software can do. Accountants are still important to provide tax planning advice; pay for it when you need that service. But when you pay $300 for your individual tax return each year there isn't much time in there for advice. They are just collating and filling in a form with the information you already gave them.
Accounting Steps Comparison
| Accounting Steps | Accountant | Yourself | Self Managed |
|---|---|---|---|
| Track Spending & Income | You | You | You |
| Save Invoices for Deductions | You | You | You |
| Save Investment Records | You | You | You |
| Calculate Income | Accountant | Excel | SM |
| Calculate Deductions | Accountant | Excel | SM |
| Fill in Tax Form | Accountant | You | You |
| Cost | $300-$2,000 | Free | Free |
Trust and Company Administration
Trusts and companies require ongoing administration to maintain compliance with legal requirements. This includes preparing meeting minutes, passing resolutions, managing share issuances, handling beneficiary nominations, and maintaining proper records of all decisions and transactions.
These administrative tasks are essential for legal compliance and proper governance, but many can be completed using templates and automated systems rather than paying premium fees to advisors.
Administration Costs Comparison
| Task | Advisor | Self Managed |
|---|---|---|
| Trust Deed | $2,000 | Free |
| Company Constitution | $1,000 | Free |
| Government Fees | $700 | $700 |
| Ongoing Admin | $2,000 | $500 |
FAQ
Basic SMSF administration typically costs $1,500-2,500 per year using an online platform. Complex structures or additional services can cost significantly more.
While you can handle some aspects yourself, SMSFs require professional audit and compliance services. The ATO requires annual audits by approved auditors.
Yes, most administration fees are tax deductible. SMSF administration fees are deductible to the fund, while individual accounting fees are deductible to the individual.
Review your administration costs annually and compare providers. The market is competitive, and you may find better value or service elsewhere.