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Mid-tier firm joins SMSF minimum balance debate

Katarina Taurian
09 February 2015 — 1 minute read

One mid-tier accounting firm has suggested a starting balance of less than $200,000 is becoming increasingly “feasible”, despite previous suggestions and guidelines to the contrary.

Speaking at a function in Sydney last week, HLB Mann Judd’s director for superannuation, Andrew Yee, said the minimum for establishing an SMSF is becoming increasingly lower, largely due to the falling costs of running a fund and increased use of technology.

“While at least $300,000 used to be quoted as a minimum balance for an SMSF, this has now reduced to, say, $200,000 or even less. This has led to a younger cohort setting up an SMSF at an earlier age than their predecessors,” Mr Yee said.


He also acknowledged the demographic shift in the SMSF sector as a result, with younger members and women increasingly becoming SMSF members.

“People in their mid-30s and early 40s are focused on paying down their mortgage and building their savings, and this is the age when they also begin to consider their superannuation and other wealth building options,” Mr Yee said.

Minimum balances have been a persistent topic of debate in recent years, escalating recently with ASIC suggesting there could be possible merit in a “soft” minimum balance or guidance on an appropriate minimum balance for SMSF establishment.

Some, like Owen Hodge’s managing partner Rolf Howard have previously suggested SMSF investors need a minimum of $500,000 either in their super fund or available through equity in shares or property to make the creation of an SMSF worthwhile.

Others, like former Custom Wealth boss Chris Appleyard, previously told SMSF Adviser the notion of a minimum asset base entry barrier for prospective trustees is outdated.

“The idea that you need a certain amount in investible assets or whatever is old thinking – we need to throw that idea out the window – you can have an SMSF with $20 in it if you want,” he said.

Mid-tier firm joins SMSF minimum balance debate
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