by Olivia Long

ASIC recently fined a well-known SMSF administrator for promoting a “free” SMSF establishment service without disclosing the conditions attached.

This has prompted an industry debate around whether a “free set-up” is appropriate or not in the world of self-managed superannuation.

Put simply, there are a number of reputable, quality SMSF specialists out there – but they lack the marketing dollars of an AMP. Rather than splash details of their offering over the back of a bus, they generate business by providing a zero barrier to entry by providing free establishment.

Sure, there’s the cost of the trust deed they have to absorb, as well as their time, expertise and IP to consider – but, at the end of the day, it’s a relatively cheap marketing tool.

What consumers need to know is that there are some emerging providers in this industry that do supply the fine print (albeit it is very difficult to comprehend), but are still, in my opinion, lacking the necessary professional skills.

In other words, and irrespective what the cost of establishment is, there are some fundamental questions that consumers have to ask before selecting a provider.

Is your provider offering a minimum term? What are the termination fees? Can you transfer your SMSF simply if you change your mind without penalties?

Further due diligence is a must when deciding on your SMSF compliance “partner”. How long has the firm been in business? What volume of clients do they assist? Who are the key staff and what is staff turnover like? Do they have existing relationships with any reputable firms they can mention?  Can they provide references upon request?

Perhaps the most appropriate requestion – are they members of any industry organisations?  If you’re going to trust somebody with the administration and compliance of your super fund – you want to ensure you’re dealing with the best.

Cost is always a factor – but certainly never the only one.