#012 - The Easiest Way to Set Up an SMSF 💡🔑

In this clip, we delve into the straightforward setup process for establishing a Self-Managed Super Fund (SMSF) and a Bare Trust. Our expert outlines the two essential application forms required, which are identical and only one page each. Listeners will learn that the initial documentation needed includes a super statement and identification, making the process accessible and efficient.

We discuss the importance of client support throughout the setup, highlighting that clients can easily reach out with questions via a dedicated personal contact. The expert emphasizes the supportive role of the Blue Chip SMSF team, ensuring clients feel guided and informed every step of the way. Tune in to discover how simple and streamlined the SMSF setup can be!

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Please note: The information provided in this recording is for coaching and educational purposes only. It should not be considered personal financial advice. Everyone’s situation is different, so before acting on any of the content discussed, please seek independent financial advice tailored to your specific circumstances.

Timestamps:

00:00:00 - 00:00:00: Introduction

00:01:10 - Client Support and Communication

00:02:45 - No Financial Advice Provided

00:04:59 - Types of Properties Purchased

00:05:52 - Contract Requirements for SMSF

00:07:05 - Single Asset Rule and Regulations

Episode Transcript

(00:00):
The actual setup process sounds quite simple. You've got two
application forms, one for the SMSF and one for the
Bayer Trust. So that sounds pretty straightforward. So
that's pretty much all you need apart from those
two pieces of those two documents, which you said they're identical.
So two one-page documents, one for the Bayer Trust,

(00:21):
one for the SMSF. You just need a super statement and some ID. Is
Yeah, so I usually explain to the clients that, you know, it sounds
pretty simple from their point of view because it is. All we need them to
do is provide those documents, which takes about 15, 20 minutes
if they really want to get the process moving. And

(00:41):
then we do the heavy lifting in the background, which is, you know, which is some fairly
technical stuff that we need to do. in the
background, setting up the entities in the right way, generating
those trust documents, which are pretty lengthy. But
So if the client is, you know, let's say they've got some

(01:01):
questions, do you give them a call or
how do you sort of hold their hand through that
process if they're sort of not sure what they're signing or
they want a bit more information or they're not sure of something? What
Yeah, so on my Zoom call, I
will always make sure that the clients program my name

(01:23):
and number into their phone whilst I'm on the call. And they know
that I'll be their personal contact through the setup process
and beyond. So if they've got questions about anything at all, they come straight
through to me. I let them know that we've got a pretty big support team,
a pretty big admin team that work behind the scenes. But
I'm the only person that they need to speak to. personal

(01:44):
contact details. We do have a dedicated
office line, but they don't
even need to call that. They can just come through to me personally. They'll also have my email
address, but most of them will text me or call
me. And I'll usually hold
their hand through the signing

(02:06):
of the trust documents. Some clients just sign them straight away
and just get them back, and some clients want to go through them in
a lot of detail. Every now and then, if a client really wants to
go through the trust documents in detail, which is fine, I'd
actually rather them do that than I'll do a
Zoom meeting for the trust documents. as well, because

(02:27):
the trust documents can look a little bit confronting when
the clients first do get them. They're quite thick, and
there's a lot of terminology which most
clients won't really understand. So I'm
Yep. And so also I noticed part of

(02:49):
that process is there's no advice that's given through this process. So
it's essentially what you're saying is essentially clients
may already know what they want to do. They might already know what they want to invest in.
They're simply using this service to
establish the fund in an efficient way without

(03:12):
Spot on. The majority of clients, 99 clients
out of 100 that I speak to, they've already decided what they
want to do. They don't need advice for
that. They've already decided that they... Most of my clients want to invest
in property. That's what they want to do. So it's probably more
important in a sense that they get

(03:33):
an understanding before they come to us,
they get an understanding if their fund can borrow money, that
that part of it is, you know, they get the green light and that's all been
ticked off. So if the client hasn't engaged a broker, I
might refer them on to a broker or tell them to
find their own broker. Obviously, they need to make sure

(03:54):
that if they are doing that, that the broker understands SMSF lending. There
is some nuance, there's some difference with
SMSF lending as to, you know, in comparison to lending in
your personal name. So that's pretty important. There's no
point setting up an SMSF to purchase property if the SMSF can't
borrow money. So I always make sure that that

(04:17):
box has been ticked before the client sets up an SMSF. But
again, most of the clients that I speak to, they
may have been referred by a broker or referred by a property group
or a buyer's agent, and those guys have already sort
of ticked that box. And by the time they get to me, they
know that their fund can borrow money because that's already been assessed. They

(04:39):
obviously know that they want that they want to buy property. Sometimes they
may have even sort of got a bit of an idea of what type of property, or
in some cases, the property has already been selected,
or earmarked at least. And it's
just a matter of talking them through the setup process and getting

(04:59):
Yep. And just with the properties,
so drilling down a little bit on the types of properties that most of
your clients are purchasing, are they residential,
industrial, commercial? And
can you tell me a little bit about that? And if it is a sort
of a residential, for example, is it

(05:21):
a one-part contract or a two-part contract? I know when you're purchasing something
in your own name, You can or a different entity that's
other than a self-managed fund you can have what's called a
two-part contract where you're purchasing the land and you're paying the stamp duty on
the land and then you go through the build process. Can you do that
with an SMSF or does it need to be a one-part contract and

(05:41):
can you tell me a little bit about that just a bit about what your clients are
purchasing and and a little bit drilling down a little bit regarding regarding
Yeah, so you can buy
any type of property inside an SMSF. We
do commercial, you know, SMSF

(06:02):
setups for commercial properties,
also industrial, but the vast majority is residential.
The vast majority, you know, the
industrial and commercial properties, sort of one
in a hundred, you know, by far the most popular
is residential. And yeah, there

(06:27):
are differences. If you're investing in property inside super, it has to
be a one-part contract. And
that's partly to do with the bear trust, with
the bear trust structure. So yeah,
so it has to be a one-part contract. You can't buy a piece of land and
then build on it. It has to be either a completed house,

(06:49):
completed townhouse or a completed unit. It
doesn't have to be completed in the sense that the
actual development is completed and handed over,
Does that come down to, I guess that probably comes down to the single asset rule, which
is part of the Superannuation Act. I'm

(07:13):
assuming it would be coming down to that, and that's probably the reason you can't have
those two-part contracts. That's right, yep. Hey guys, just a quick disclaimer
and just a reminder that this is not personal advice, so make
sure you speak with a licensed advisor before making any investment decision.
Thanks for tuning in to this episode of SMSF Insider. If
you got value from this, make sure you subscribe so you never miss the

(07:34):
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