High cost, low balance SMSFs are in ‘transition’ period: report finds

High relative operating costs experienced by SMSFs with small balances is indicative of a transition period, and not an ongoing situation, according to the June 2016 Class SMSF Benchmark Report.

“Recent industry commentary has suggested that self managed super funds with smaller balances are not cost effective, citing that based on ATO data, funds with balances of $50,000 or less have lost 15 per cent over 7 years to June 2014,” said the report.

According to the ATO’s Self-managed superannuation funds: A statistical overview 2013-2014, the most recent report available, the average operating expense ratio in 2013/14 for SMSFs in the $1 – $50,000 range was 12.05%. Read more...