Self Managed Super Fund

Take greater control over your retirement savings.

Hearing the term ‘self-managed’ might make you think you need to do everything yourself - this is not exactly the case

An SMSF provides efficiencies around the tax benefits of super, unparalleled investment flexibility and cost advantages. However, in many situations, the full benefits of an SMSF are only grasped when others are involved. 

What is a Self Managed Super Fund?

A Self Managed Super Fund (SMSF) is a private superannuation fund that you control and manage on your own, often with the assistance of a Financial Planner. SMSFs provide members with power, flexibility, and choice through how their retirement funds are invested. According to the Australian Taxation Office’s (ATO) most recent figures, there are almost 600,000 SMSFs in Australia. These accounts have over 1.1 million Australian members.

Key Benefits

Is a Self-Managed Super Fund a good idea?

An SMSF comes with a number of notable benefits for its owners. While their are some downsides, a well-managed and correctly established SMSF can generate greater investment returns for owners, and offers far more control.

The key benefits of an SMSF are:

  • Greater control of your investments
  • A wider array of investment opportunities
  • Ability to invest in a self-managed super fund property
  • Notable tax benefits and savings
  • Potential to save on fees and associated costs.

While the term ‘self-managed’ may sound like you’ll be doing everything yourself, that’s not quite true. It’s essential that your SMSF is compliant with Australian laws and regulations. Each Self-Managed Super Fund will also need to submit an annual tax return. At MoneyLab, our team of specialists offers expert administration and compliance services for SMSFs, as well as advice and assistance for SMSF investment strategies.

How do SMSFs work?

A self-managed fund is run only to provide retirement benefits for the members of that fund. It is controlled by the trustees, who are delegated members. The trustees ultimately decide how the money in the fund will be invested, which will determine how returns are generated.

The investment strategy of an SMSF must be documented and should be tailored to suit the member’s needs. When creating an investment strategy, important considerations include: 

  • Members’ age, financial position, and risk profile.
  • Diversification to minimise risk exposure.
  • Liquidity, and how investments can be turned into cash at a later date to pay out member benefits as required.
  • Insurance requirements of each member.

It’s best to seek expert advice when creating an investment strategy for your self-managed super fund.

How do Self-Managed Super Funds compare to retail and industry super funds?

There are many ways in which an SMSF differs from a standard retail or industry superannuation fund. Most notably, the trustee of an SMSF has much greater control over their investments and the fund itself.

Other differences include:

  • SMSF members are trustees of their own fund 
  • SMSFs can have up to 6 members in the fund 
  • SMSFs are regulated by the ATO and ASIC 
  • SMSFs require more involvement, along with an annual tax return 
  • SMSFs do not have access to the Superannuation Complaints Tribunal to resolve disputes 
  • You can invest in property through an SMSF. You are unable to invest in property through a retail fund.

The ability to invest in property with an SMSF can create a much more stable investment strategy that delivers consistent returns over time. Some of the benefits of a self-managed super fund property include discounted or zero capital gains tax on your property and a marginal tax rate for your deposit.

We often hear people ask, how much money do they need for a self-managed super fund? The answer is not clear-cut. There is no minimum balance for an SMSF. However, it generally only becomes worth it when you start with at least $250,000.

How do I open a Self-Managed Super Fund in Australia?

Setting up a self-managed super fund is an involved process and it’s critical that it is done properly. A self-managed super fund in Australia must follow a number of laws and regulations, so expert advice is a must. At MoneyLab, we’re here to help.

Our team of financial planners has immense experience in establishing and administering SMSFs of all sizes. We’ll advise you on the most appropriate structure, and help you devise an effective investment strategy that suits your needs. Get in touch with MoneyLab today.

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Harry Matsoukas

Harry Matsoukas

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