After initially requiring SMSFs to open a trust bank account and trading settlement account with ANZ, and do any superannuation account share trades via E*Trade, ESuperfund shifted to using Macquarie bank (I think) and Comesec as broker for new SMSFs. Existing SMSFs weren't affected initially, but I doubted that ESuperfund would support the old relationships in the long run. Sure enough, a letter yesterday advised that our SMSF would no longer be able to use E*Trade from next month, and enclosed a batch of paperwork to sign authorising a new brokerage account be established with Comsec, and to transfer existing SMSF stock holdings from E*Trade to Comsec. Fortunately we've only invested in Vanguard Lifestages High-Growth index fund and have no direct stock investments with our SMSF, so there's no need to complete the paperwork to transfer any shares.
I will get DW to counter-sign the paperwork setting up a trading account with Comsec, as we might choose to invest directly in some stocks in the future (or I may do an in specie transfer of some stocks I own individually into my SMSF account, although there would be capital gains tax implications).
There is a small amount of money sitting in the ANZ trading settlement account which will need to be transferred into the main trust bank account, but I'll just log into our E*Trade account and do this manually rather than completing the extra paperwork.
Over the years I've noticed that this is the normal way that financial companies close off unwanted account options - first they make the new provider compulsory for new accounts, but let existing accounts stay with the old provider if they choose not to change services. After six to twelve months they usually make the change compulsory for existing account holders as well. I can only guess that it's done this way so that most existing account holders see the change as "optional", and only those accounts that are still with the old provider after twelve months are forced to change, and may therefore get annoyed.
I can't see that this change of banks and broker services is of any benefit to ESuperfund SMSF account-holders, so it's probably being done for the benefit of ESuperfund (they dress it up as a way to "maintain their low fee structure", which is their main competitve advantage over other self-managed superannuation account administration service providers).
Copyright Enough Wealth 2007