Speaking to SMSF Adviser, Moran Howlett Financial Planning practice principal Cameron Howlett said outsourcing companies and advancements in software have already begun to drive down the costs of SMSFs, making them more accessible for clients with lower balances.
Mr Howlett said the minimum balance required for an SMSF in the past was around the $300,000 to $400,000 mark.
“That was simply a function of what accountants need to charge to run an SMSF, so subsequently if accountants need to charge $3,000 to $3,500 at one per cent, when you scale that up that’s giving you a funds under management of $300,000 to $350,000.
Mr Howlett said there are now some SMSF services charging as little as $800 per year for a service providing financial statements, tax returns and daily audits giving a full position of the fund.
“Whether that’s a [quality] service or not, I don’t know, [but] when costs come down you might only need a balance of around $80,000 to $100,000 to have money in an SMSF,” he said.
Traditionally, individuals with those sorts of balances have not been interested in SMSFs so the lower costs “open up the ability for people to have self-managed super funds at an earlier age”, he added.
“It will mean that SMSFs become a lot more accessible for clients with lower balances which has already started to happen,” Mr Howlett said.
“Whether that’s right or wrong, I’m not going to comment on that, [but] perhaps that’s where it’s heading.”