Cost of six members on par with second SMSF, says tech expert
For SMSFs considering six members in their fund, one technical expert has highlighted that running two SMSFs may be comparable in cost to running six different segregated investment portfolios.
Cooper Partners head of SMSF and succession Jemma Sanderson said that while extending the member limit certainly has its merits where families have got more than two children and they want to include their children in their fund to help kick-start their superannuation, running segregated investment portfolios for six different members could result in a lot of additional work for SMSF firms.
“If you’re running separate segregated investment portfolios for six people in a fund, then that can become administratively quite cumbersome to manage, and so the cost of running that versus having two separate funds is six of one and half a dozen of the other,” said Ms Sanderson.
Ms Sanderson also stressed that the trustee structure of the fund is critical when looking at the number of members in a SMSF, with the administration of the fund much simpler with a corporate trustee structure.
“Having six individual trustees is a nightmare. Super funds shouldn’t have individual trustees in my view. They need to have a corporate trustee and that just makes things so much easier from an ongoing administration perspective,” Ms Sanderson said.
“If you had six individual trustees in there, which I hope no one would recommend, one of them passes away or someone wants to leave the fund, you’0ve got to update all the asset registrations.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.