DIY Super Trust Creation

Self Managed Superannuation These guys recommended to me by a friend as an inexpensive way of creating an SMSF - only $473 plus stamp duty! My accountant uses a different company which is cheaper but ends up being $700 after he does his bit as well. I guess if you feel you know enough about your needs to brief someone yourself you use one of these companies (and there are lots and lots of them) otherwise you get an "adviser" to ensure you get what you need. Of course you pay a little more but not much in the scheme of things.

SISA Legislation

SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993 If you really want to dive into the deep end, here is the dreaded SISA!

ASFA

ASFA - Small/DIY funds - Menu The Association of Superannuation Funds of Australia Limited has advice for Trustees and a pretty good summary of the issues of running your own fund. Check it to see if it is really your style before taking the plunge. Also has some stats about small and DIY funds collected by APRA in January 2003:

246,000 small funds

430,000 members or average 1.75 per fund

$99 billion in assets or average $230,000 per fund

Taxpayers Australia

Taxpayers Australia Superannuation Australia is a subsidiary of Taxpayers Australia and is headed up by Barbara Smith, a prolific superannuation author. They produce a DIY Super Manual (how to do it) and Update service (alert you to how changes in SISA will affect your fund) and some other tools. They are an agent for the Simple Fund software from BGL as well. You can also purchase a Trust Deed with instructions for tailoring to your needs. A good source of information, books and tools for anyone who really wants to "do it yourself".

Castle Corporate Services

Castle Corporate Services This is the company used by Taxpayers Australia to create Trust Deeds for an SMSF. There are obviously many different companies doing this. My conclusion from looking at quite a few of these is that you go with the one that your adviser recommends even if that costs a little more. If you incorrectly instruct the organisation drawing up the Trust Deed you can only blame yourself and will (probably) not have any legal comeback. A few hundred dollars is insignificant in start-up costs and not an important consideration in getting the SMSF underway.

Naming Your Super Fund

LawCentral Online Australian Legal Doc Shop Trusts, Wills, Corporate Documents, SMSFs If you wondered whether there are any limitations on the name of your superfund, this document from Law Central answers this and other questions. In summary:

you can use any name you like

it doesn't have to be unique

there is no central register of names you can check anyway

We'll probably call ours "Bainsworld Superannuation Fund" just to get the "bainsworld" monicker onto something official!

Cleardocs

Cleardocs Australian Online Legal Documents The more you look the more of these you find. If you want to do all the legwork yourself and just need the legal documents to create a company or trust then this company is very inexpensive. Creating a Superannuation Trust only costs $137.50 but you'd better know what you are doing!

Corporate Network Ltd

Corporate Network Ltd This is the company that my accountant uses to set up companies (that's how Thought Croft was created), trusts and super funds for his clients. They charge $325 for an SMSF set-up so given my accountant charges about $700 all up his services come to about $375 for basically filling out the forms and ensuring the correct filings are made to the ATO. Looks like CNL is making their internal admin systems software available to improve throughput (and lower their admin costs) although not quite there yet.

Reference Books

I've been consuming books like crazy to get ourselves ready for managing our super (and as a consequence of starting an Investment Partnership in late 2001 with Caroline and 13 other people now down to 12 in total). These include:

Do It Yourself Superannuation by Austin Donnelly and Barbara Smith (4th Edition)

Guide To Self Managed Super Funds by Grant Abbott

The Intelligent Investor by Benjamin Graham

Security Analysis by Benjamin Graham and David Dodd

A Wonderful Company At A Fair Price by Brian McNiven

Borrowing To Invest by Noel Whittaker and Paul Resnik

The Intelligent Investors Guide to Share Buying by Tim Hewat

The Warren Buffett Way by Robert G Hagstrom

The Warren Buffett Portfolio by Robert G Hagstrom

The Brian McNiven book is fantastic! He provides terrific insight into the real story behind company financial reports and when dividend payments make sense to shareholders and when they don't. The Benjamin Graham stuff is great also. Security Analysis was written after the Depression but the comments about company and market behaviour describe the tech meltdown of 2000 just as perfectly.

Why Start Your Own Super Fund?

After watching the performance of our personal superannuation and testing our investing know-how through an Investment Partnership with 10 other friends, Caroline and I are about to press the button on starting an SMSF - a Self Managed Superannuation Fund. We think the benefits of making our own investment decisions will be enormous. For a start, the fees will be a LOT lower and that alone will make a huge difference to the final value of our super funds. Currently we pay a 4% entry fee and a 1.8% management fee. Based on our current funds, an SMSF will take about 1% to run with no entry fees and this will reduce as the fund grows as it is essentially fixed. The ability to make sensible taxation decisions about dividends with franking credits and to really exploit the power of compounding capital gain will also prove to be a boon. As long as we make good investments of course. I'll keep blogging with our progress and experiences so join in with your own if you feel like it.