Many people jump into setting up a self-managed super fund (SMSF) without fully realising the minefield of administrative and legal obligations required of them. SMSFCheck provides a tool to assist newcomers to the SMSF market and ensuring their SMSF investment strategies are ATO compliant.
What does SMSFCheck do?
Historically, the process to get an SMSF investment strategy ATO compliant was painstakingly long, with generally long lead times from initial contact with an adviser or accountant to finalisation of the review. SMSCheck was developed to solve this issue. The SMSFCheck tool allows a Trustee to answer a series of questions and get a review of their investment strategy in around 15 minutes.
SMSFCheck is not linked with any financial provider and as such remains independent. Users of the tool can expect that any assessment of the investment strategy has not been biased in any way by any underlying commercial relationships.
At time of writing, SMSFCheck charges a flat fee of $199 including GST.
Who is SMSFCheck aimed at?
SMSFCheck is aimed at SMSF Trustees looking to speed up the compliance process for their SMSF investment strategy, and at the same time save on costs.
How does SMSCheck work?
Users of the SMSFCheck platform are asked approximately 50 to 60 questions regarding their SMSF investment strategy. The platform effectively provides a ‘rules engine’, which assesses the investment strategy and highlights any areas of deficiency in regards to legal or administrative compliance.
If the investment strategy is deemed fully compliant, no further action is required by the SMSF trustee, however, should compliance shortfalls be detected, the Trustee should seek further advice from their accountant or financial adviser to rectify the shortfalls.
Apart from the speed at which compliance reviews can be undertaken, an additional benefit of SMSFCheck is that it allows trustees to streamline their compliance process, requiring them to seek advice only on the areas of their strategy that fall short, not the entirety of the strategy.
SMSFCheck provides an FAQ section, which can be accessed here SMSFCheck – FAQ.
Canstar sat down with Ronald Daliya, CTO of SMSFCheck to ask him some further questions regarding SMSFCheck and the SMSF industry in general.
Q: Who are SMSFs best suited for?
A: This is variable. However, it is generally investors that have become disillusioned with traditional retail or industry super funds because of the lack of financial performance or not engaging their investors and keeping them up to date with events.
SMSF investors should keep in mind that their returns on the SMSF should be able to cover their setup and administration costs for their SMSF. As such, initial balances of $200,000 or more is generally required for this to be achieved. SMSF trustees should also ensure that they operate their administration in a slim capacity.
Q: Are you seeing a growth in the number of SMSFs being created?
A: Due to the recent volatility in markets, we have seen a slowing in the uptake of SMSFs. We have also been seeing a shift in the demographic of SMSF investors from older investors approaching retirement towards younger, Gen X and Y investors who may have generally come into an inheritance or transfers of wealth from baby boomers to their children. This younger group of investors is particularly mistrusting of traditional advice channels.
Q: What is the benefit of SMSF trustees first coming to SMSCheck before seeing their financial planner, accountant or solicitor?
A: The predominant benefit for investors to first go to SMSFCheck is that it allows them to substantially cut the time required to make their SMSFs compliant. There are a number of legal obligations that SMSF’s are required to comply with. By using SMSFCheck’s software, it allows users to determine whether their SMSF are in compliance, or highlights areas of deficiency, in around 15 minutes. This is in contrast to traditional face-to-face advice.
If the SMSF does require further review, then the trustee will need to seek advice from a planner or an accountant for the areas in the SMSF investment strategy that are deficient.
Additional benefits of using SMSFCheck is that the service is competitively priced as compared to traditional advice channels and that the advice given through the SMSFCheck tool is completely independent.
Q: What are the obstacles and risks of having an SMSF over traditional superannuation accounts?
A: There are many administrative and compliance obligations for SMSF trustees, which can be a ‘minefield’ to get your head around. The major risk is that SMSF trustees run their funds with an investment strategy that is not ATO compliant.
Q: Who are your major competitors?
A: There are no direct competitors for this area of advice in Australia. The SMSF advice market is quite niche.