Self-managed superannuation funds (SMSFs) are a popular option for investors seeking flexibility and greater control of their superannuation. But the decision to establish an SMSF should not be taken lightly. Whether an SMSF is suitable for you will depend on your needs and circumstances and whether you are willing to take on the duties and obligations of being a trustee.
SMSFs are small superannuation funds which are established and operated by the members of the fund. Under the superannuation rules, the members of an SMSF are generally required to act as a trustee of the fund or as a director of
the fund's corporate trustee and are legally responsible for managing the fund in accordance with the relevant superannuation laws.
Because SMSFs are self-managed they can be more flexible and give members more control over how their super savings are invested and managed.
For example, SMSFs can allow members to:
• develop a tailored investment strategy that is specific to their needs and circumstances rather than having to invest via a pooled structure
• be directly involved in making the investment decisions for the fund
• invest in alternative asset classes not available in large funds
• acquire certain business premises which can then be leased back to a related party, such as a member, to use in a business
• gear their superannuation savings by implementing a limited recourse borrowing arrangement
• pay retirement income streams tailored to their specific requirements
• implement estate planning strategies tailored to their specific needs and circumstances.
SMSFs can also be more cost effective than large superannuation funds. However, this very much depends on how involved you want to be in managing your fund and whether your fund will be large enough to justify the costs associated with running an SMSF.
While cost is an important consideration there are a number of other important issues to consider before deciding that an SMSF is right for you.
Read the full SMSF fact sheet
for information on Trustee roles and obligations, risks of SMSF structures, requirements, breaches and penalties, compliance and ATO publications.
Additional fact sheets for general information:
Structuring Assets within a SMSF
SMSF and Limited Recourse Borrowing Arrangements (LRBA)
Borrowing to invest in your SMSF
Contributing Shares to your SMSF
Holding insurance through your SMSF
Transferring a business premises to your SMSF
As circumstances vary, contact us and meet with an SMC Financial Adviser* to discuss whether an SMSF is the right choice for you.
*SMC Financial Advisers Pty Ltd ABN 40 100 223 130 trading as "SMC Advisers" provides its financial planning services as an Authorised Representative of Count. 'Count' and Count Wealth Accountants® are trading names of Count Financial Limited ABN 19 001 974 625 Australian Financial Services Licence Holder Number 227232 a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Count is a Professional Partner of the Financial Planning Association of Australia Limited. Count advisers are authorised representatives of Count. www.count.com.au