4 things to look for in a compliance provider
Your ideal provider will depend on your fund and the other experts you already have on your team.
The rules and regulations governing SMSFs run to thousands of pages, with complex technical updates issued every year. So how can you meet your compliance obligations without devoting your life to paperwork? It could be time to find an expert.
Most of us start SMSFs because we want to take control of our investments. So it can come as a shock to learn that an SMSF trustee’s life is as much about meticulous compliance as inspired investing. Here’s an (incomplete) list of the where the rules your SMSF needs to follow will be listed:
- Your fund’s SMSF Trust Deed
- The Superannuation Industry (Supervision) Act 1993 and related regulations
- The Income Tax Assessment Act 1997 and related regulations
- The Corporations Act 2001
Remember too, that super laws can and do change frequently. Miss an important change, and you risk being non-compliant.
None of this means that you can’t take care of compliance yourself, especially if you have a relatively simple fund. Nonetheless, faced with this level of complexity, many SMSF trustees choose to get help from an SMSF administrator or compliance provider.
So what does a compliance provider do, and how do you choose one?
What is a compliance provider?
A compliance provider can be an accountant, a financial adviser or a specialist SMSF administrator. While different providers can offer slightly different services, they all take care of the time-consuming but vital tasks required to keep your fund compliant — freeing you up to focus on the interesting part of managing and choosing your investments.
A good SMSF compliance provider can help you by:
- Setting up the fund, including creating a compliant Trust Deed.
- Taking care of day-to-day administration, compliance and tax.
- Taking care of statutory reports and returns, often including tax returns, Business Activity Statements and annual audits.
- Providing regular investment performance updates.
- Keeping you up-to-date on compliance changes.
- Alerting you to potential compliance risks and helping you fix them.
- Providing educational tools and resources, so you can learn more about SMSF strategies and investment options.
Working with an SMSF administrator
Choosing the right compliance provider
Your ideal provider will depend on your fund and the other experts you already have on your team. But here are four key characteristics to look for:
- Systems. Great providers invest heavily in technology, with online systems that give you instant access to deeds, minutes, up-to-date fund balances and other essentials.
- Monitoring. Your administration service should monitor your fund constantly, and then notify you or your financial adviser immediately if there are any potential issues — for example, if one of your fund’s members is approaching their contribution caps for that year.
- Speed and scale. When it comes to compliance, scale can be a definite advantage. Larger administration services are often able to deliver services and updates more quickly and easily, thanks to their investment in cutting-edge technology.
- Frequency. You should expect to receive frequent updates from your provider, including daily investment prices and important notices, such as corporate actions on your share investments, as soon as they’re issued.
About the author
David Busoli, National Manager of SMSF Education at AMP SMSF