As with estimated SMSF investment performance data, care must be taken when using the operating expense ratio figures as comparisons may not be meaningful. While the methodology used to estimate the operating expense ratio is as close as possible to APRA’s method, the data collected is not the same (see appendix 2).
The estimated average operating expense ratio of SMSFs fell over the four years to 30 June 2011 (0.69%, 0.58%, 0.57% and 0.56% from 2008 to 2011 respectively) and remained stable at 0.56% in 2012.37
Despite this, estimates of average SMSF operating expenses increased each year from 2010 to 2012 ($5,000, $5,300 and $5,600 respectively). This followed decreases in 2008 and 2009 ($6,500 and $5,100 respectively). SMSFs solely in the accumulation phase had estimated average operating expenses of over $7,500 in 2012.
In 2012, SMSFs with $50,000 or less in assets had an average operating expense ratio of 9.5%. This compares to SMSFs with more than $500,000 in assets that had an average of less than 1% (see appendix 1, table 22).
As can be expected, graph 19 shows the estimated operating expense ratio for SMSFs declined in direct proportion to the increased size of the fund.
Graph 19: SMSF operating expense ratio, by fund size
The majority of SMSFs had an estimated operating expense ratio of 1% or less (65% of SMSFs in 2012), the highest proportion (41%) of which had an estimated operating expense ratio of 0.25% or less (see appendix 1, table 23).
Approved auditors play a major role in regulating SMSFs. In the year ended 30 June 2012, the average audit fee was $556 and median audit fee $457. The trend decreased each year from 2008 to 2012 for both average and median audit fees. Fees varied significantly depending on the services provided. The average audit fee for those who completed only the SMSF audit was $530. Approved auditors reported as providing other services charged an average fee of $874 (see appendix 1, table 24).
Generally over the five years to 2012, SMSFs reported they were paying less for approved auditor fees. In the year ended 30 June 2012, 56% of SMSFs paid less than $500 in approved auditor fees, compared to 51% in 2008. Only 2% paid $2,000 or more, compared to 4% in 2008 (see appendix 1, table 25).