Ascendancy Planning have designed this process to ensure you receive quality advice and your SMSF is established following the rules set down by ASIC and the ATO.
Follow the process
Remember we are here to help you with your SMSF and retirement journey. However, to work with us you must follow each step of our process in the correct order.
While you no doubt are excited and keen to set up your SMSF, you can not proceed to another stage in the process until the step prior is completed in its entirety.
Knowledge and careful consideration
Completing each set of the process will give you the knowledge and confidence to move to the next stage. If you are not confident, you can ask more questions and seek more understanding.
By the time you complete your SMSF and property purchase, you will be happy in the knowledge that you understand all the risks and have given the decision careful consideration.
Compliant
The process is designed to keep you as trustees compliant with the regulators, the main ones being ASIC and the ATO. This is why we won’t let you proceed to the next stage until you have fully satisfied the previous one.
Exit points
Through the early stages, you are able to exit at that point in the process. These exit points will be identified. However, as you get towards the end of the process, you will be committed to finalising the establishment of the SMSF, these stages will also be identified.
Let’s get started!
At any stage, if you are unsure ask questions, educate yourself and move at a pace that suits you.
Stage 1 – Do your own research
Exit Stage
It is imperative that you research and educate yourself about SMSFs and investing in property. You need to own your decisions, knowledge is power. While this guide should help you, please review the ATO & ASIC websites. You are free to contact us with factual questions.
Stage 2 – Do you qualify?
Exit Stage
You need to meet some pre-qualification requirements before you can proceed, this ensures that you don’t waste any time or resources pursuing something you are unable to do.
2a. Do you want to set up a SMSF and buy property?
While this seems an obvious question, please only proceed if you really want to use your super to purchase property. This means that all things being equal you will be a proud SMSF trustee.
If you don’t want to proceed at this point – don’t, it is important that we only work together if you are a willing participant.
2b. Do you have more than $150,000 combined in super?
It is Ascendancy Plannings policy not to give advice to set up SMSFs with a starting balance of less than $150,000 that is going to be used to borrow to invest in property. The $150,000 plus starting balance can be made up from the combined members super.
2c. Do you have on hand the initial documentation?
You need to have in a PDF format, the following documentation;
- Last years full super statement for each fund you wish to move to your SMSF
- A balance update (screenshot is fine), no older than 30 days, for each fund to wish to move to your SMSF
- Latest insurance statements for all personal insurance held outside super
These documents will be required to be uploaded to Ascendancy Planning.
2d. Your proposed SMSF can borrow the money
At this point, you need to speak to a specialist SMSF broker. They will be able to let you know how much your SMSF could borrow. This will provide you with a purchase price for the property you wish to invest in. Please note that it is not a guarantee that you can borrow this money, but it will at least let you know if it is worth proceeding.
2e. Have you done a fee comparison?
Setting up and running a SMSF can be costly and more expensive than industry and retail super funds. Fees erode your balance and can make a massive difference to your balance at retirement.
ASIC has a recommendation that a SMSF is not set up if the balance is below $200,000. A reason for this is the cost as a proportion to the fund balance so that you don’t lose your hard earned money to fees.
Strategic Super – SMSF Fees
If you choose to use Strategic Super as your SMSF administration, their annual fees are as follows;
| Starting Balance* | ||
| Strategic Super Fees | $150k – $199k | $200k plus |
| Annual Fee (charged monthly) | $1,650 | $2,388 |
| ASIC Management SMSF | $242 | $242 |
| ASIC Management Fee Bare Trust | $242 | $242 |
| Total Strategic Super Fee | $2,134 | $2,872 |
| Government Fees | ||
| ASIC SMSF Corporate Trustee | $263 | $263 |
| ASIC Bare Trust Corporate Trustee | $53 | $53 |
| ATO Levy | $259 | $259 |
| Total Government Fees | $575 | $575 |
| Total annual SMSF fees | $2,709 | $3,447 |
| One off Establishment Fees | ||
| SMSF & Corporate Trustee | $1,650 | $1,650 |
| Bare Trust & Corporate Trustee | $2,860 | $2,860 |
| Total Establishment Fees | $4,510 | $4,510 |
*Your starting balance is the sum of all your initial rollovers and/or initial contributions to your SMSF. If you start out on the lower fees, on the 37th month your fees with Strategic Super will increase to the full fee schedule regardless of your balance.
SMSF Annual fees as a percentage of SMSF balance
| Balance in SMSF | ||||
| Annual Fees* | $150k | $180k | $210k | $230k |
| $2,709 | 1.81% | 1.51% | – | – |
| $3,447 | – | – | 1.64% | 1.50% |
*including government charges
How to do a fee comparison
Collect all the super statements for the members that will be joining the SMSF. Find the fee disclosure on the super statement and add them together. Using this total you will be able to compare what you are paying now and what a SMSF will cost you to run.
Do not continue until you have completed stages 1 & 2
Stage 3 – Roles and Responsibilities
Exit Stage
You will be required to complete the Roles and Responsibilities Declaration. This document is extremely important as it defines what service each business is providing and who is giving the advice to setup up your SMSF and purchase property in it. This will be completed electronically with the SMSF application process.
Stage 4 – The SMSF test
Exit Stage
We will be interested to see a demonstration of your SMSF knowledge. Completing this test will give us and you an indication of your SMSF and financial literacy.
There is no “pass” mark, however, if you score low then this will be an indicator to you may need more education prior to proceeding.
If there is more than one member of the proposed SMSF, you can all complete the SMSF test together.
Stage 5 – Engage your financial planner
Commitment Stage
Once you sign our online engagement form you will be committed to paying our professional fees regardless of whether our advice is to establish a SMSF or not. If you establish a SMSF your fund can pay for our fees.
To engage us, you need to complete the online Ascendancy Planning engagement form, which will include an extensive fact find.
Stage 6 – Review your Statement of Advice
Exit Stage
Once we have collected the relevant personal information from you, we will prepare a statement of advice (SOA). In the SOA we will provide a considered opinion on whether a SMSF and the subsequent purchase of property is suitable for you.
The SOA and discussions you have with your financial planner are crucial in your decision-making process.
In some cases prior to starting the SOA, you will need an insurance review. These reviews will either be completed by your financial planner or (after you consent) SMSF Insurance Partners.
Once you have your SOA and insurance review you are ready to make your decision to set up your SMSF.
Stage 7 – Engage your SMSF Accountant
Commitment Stage
This is a commitment to the establishment of your SMSF – not the property. Your commitment to the property purchase will happen on the unconditional status of the contract.
Now that you have decided to set up your SMSF you need to engage your specialist SMSF accountant. If you wish to use Strategic Supers’ services we will share the information we have that will enable them to establish your SMSF.
Stage 8 – Your SMSF documents are ready for signing
Commitment Stage
Included in the establishment process Strategic Super will set up a Macquarie Bank account for your SMSF and apply for the ABN and TFN
Once Strategic Super have set up your corporate trustees and prepare the SMSF and Bare trust documents, they will send them out to you for signing.
Stage 9 – Finance and Contract
Once your documents are signed you can go under contract and formally apply for finance.
Strategic Super can assist you with paying your deposits and guide you through the process.
Stage 10 – Settlement
You made it! The property now settles and your SMSF is now a proud owner of an investment property. The rent is received by the SMSF and all expenses are paid by the SMSF.
Stage 11 – Personal Insurance Review
You may require an insurance review at this stage if you have left money in your old super funds and are looking to roll over the remainder. Also, your debt levels due to borrow may be different from what you anticipated.
Remember we are here to help
Ascendancy Planning and Strategic Super are on your side, we are here to answer your questions and make the running of your SMSF as easy as possible. While we live and breath SMSF we understand that this is probably your first time taking charge of your hard earned super, we respect that, no question is too silly and feel free to ask the same question more than once, we don’t mind. We love engaged clients taking charge of their retirement.