At first glance, the idea of having an accountant for something that is referred to as a DIY super fund or “self-managed” seems rather counterintuitive.

Isn’t the whole point to be able to use your own expertise, build your own portfolio, based on your own investing strategy and enjoy way more control? If so — and all indications would point to this — why would individual trustees of an SMSF employ a financial adviser or a licensed accountant for an SMSF?

Well, let’s hit you with a sobering statistic: a recent survey done by the SMSF Association shows that a third of SMSFs that are set up are facing trouble. The proportion of trustees who won’t have enough to live a standard of living according to their goals is rising from 25% to 30% in just over a year.

The Association concludes that even though they say that SMSFs still present the best option for a secure retirement, this issue “highlights the need for them to get specialist advice”.

Yet another study has found that a third of SMSFs that do not receive support and oversight from licensed accountants are deemed non-compliant — and this brings a whole new host of issues.

In short: SMSF accountants could make all the difference between long-term prosperity and short-term bust.

What is the Role of an Accountant in SMSFs?

Accountants who specialise in SMSFs understand the dual burden and desire to establish a greater degree of control over one’s personal investments and yet the gargantuan task of having to comply with the myriad super and tax laws.

Of course, the global financial crisis was more than a monetary crisis: it became a crisis of faith, with many hardworking and trusting individuals putting the management and control of their money in the hands of so called “wealth creation spin doctors”.

Was money or financial laws the problem? In part, perhaps. But, by and large, it was down to the individual and his or her intentions. The idea with super laws and new finance regulations, as well as strict compliance is that it demands greater transparency between individual trustees and their financial advisors.

This is where accountants ended up carrying the off-flow of those who no longer wanted to turn to wealth management companies or financial advisors. There is a greater body of ethics and compliance governing CFAs, CPAs and CGAs.

For these individuals, compliance in accordance with strategy is part of the package — not something to avoid but something that is part and parcel of superannuation funds.

Where people lost faith in financial advisors, independent or not, they turned to accountants whom they viewed as having knowledge of regulatory practices as well as financial acumen.

In relation to client SMSFs, accountants who specialise in superannuation provide various services, including accounting services, administration, taxation, financial planning & strategy, trustee services and auditing — all relating to the superannuation fund, of course.

Providing “End to End” Service

There are three distinct areas in which SMSF accountants work to keep the fund prosperous and growing as well as compliant and steady. They are:

    • accounting
    • administration
    • financial advisory

Note that the changes in the laws means the rules are tighter than ever: taxation accountants must have a license for financial advising in order to actually provide investment advice and direction.

Trustees find that working with an SMSF accountant not only helps them grow their own expertise but also allows them to breathe a sigh of relief for breath they didn’t even know they were holding.

They don’t necessarily lose ownership or control — they simply are more aware, without adding more to their plate.

For example, SMSF accountants provide, as services, preparation of the fund’s financial statements, drafts relevant minutes and the preparation of quarterly accounts. This calls on everything from very general tasks of up-keep to very specialised knowledge of accounting standards applicable to superannuation funds.

In order to make their service seamless and not cut their client’s needs off at the knees, the SMSF accountant also acts in an administrative role or, where they are not the administrator, the liaison between client and administrator.

If the accountant is the administrator, they would look after issues of purchase and redemption of the fund’s investment and maintenance of members’ records.

Licensed SMSF accountants under the FSRA can also provide the trustees with ongoing strategy, advice and, since it is a requirement of setup, write the fund’s main investment strategy. They may make recommendations, prepare investment documentation in compliance with requirements of reporting and provide portfolio monitoring services.

Using SMSF Administration Firms To Keep What Belongs To You…With You

One of the most important functions that a specialist accountant with SMSF experience can provide is auditing services. This is very beneficial to the trustees and one of the true hallmarks of having an accountant by your side.

Superannuation funds are subject to auditing by an Approved Auditor every year — at the very least.

This is the moment in which your SMSF accountant’s involvement in all these three arms or roles within the fund comes to a head and where you can rely on them to not only keep ongoing accurate records but prepare the documents that will make the auditing process a true breeze.

SMSF Administration firms are built specifically to laser-focus in on the set-up, registration and compliance of SMSFs. When SMSF accountants work with these firms, they can focus on growth, strategy and research. The offerings they present to trustees or make recommendations on can be better suited to the trustee’s long term goals.

Especially if the portfolio is diverse and includes a number of different kinds of investments — commercial property, art works and international shares, for example — the administration of all three of these entities will require deep knowledge of not just how to record but how to shelter investments while still complying.

What Do Non-Compliant SMSF Trustees Risk?

The point of having SMSF accountants do due dilligence is, clearly, multi-fold. In every general terms, they help trustees stay on top of a fund’s legal and financial obligations so trustees can take advantage of the strategy and efficiency.

Remember the one-third of non-compliant SMSFs spoken about earlier? Here’s what they’re risking:


    • enforceable undertaking
    • administrative penalties
    • disqualification of a trustee
    • freezing of an SMSF assets
    • having the SMSF wind up

And more. The main contraventions have aways been the “small things” like issues related to administration or failure to document a change in investment policy. With an SMSF accountant, you can stop sweating those “small things”.