Self Managed Super Fund

Take control of your investments

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. 

An SMSF provides efficiencies around the tax benefits of super, unparalleled investment flexibility and cost advantages. But the biggest advantage is the active control people have over building wealth for their retirement. 

Hearing the term ‘self-managed’ might make you think that you need to do everything yourself. This is not the case, and, in many situations, the full benefits of an SMSF are only grasped when others are involved. 

Your SMSF requires an annual tax return and must remain compliant. The team at moneylab can provide administration and compliance services for SMSFs, as well as investment advice and assistance with the formulation and execution of your SMSF investment strategies. 

Key Benefits

How do SMSFs work and how do they compare with retail & industry super funds?

Trustees manage SMSF funds by making investment decisions. It’s a legal requirement for SMSFs to have a documented investment strategy.  

Important factors to consider when developing an SMSF investment strategy include: 

  • The individual characteristics of fund members, such as age, current financial situation and risk profile. 
  • The benefits of diversifying the fund’s investments to reduce risk. The major investment options are cash, fixed interest products, direct shares, managed funds, listed property and real estate. 
  • Liquidity – how easily assets can be converted to cash to pay future member benefits when required. 
  • The current insurance needs of the members to ensure appropriate coverage is arranged. 

The major differences between an SMSF and other super funds are that: 

  • SMSF members are trustees of their own fund 
  • SMSFs can have up to 6 members in the fund 
  • SMSF trustees develop their fund’s investment strategy and make all investment decisions 
  • 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 

Investing in property through a SMSF

Often, relying on your super for a comfortable retirement is not enough these days, especially if you are supporting a family. Therefore, making investment decisions sooner rather than later can really make a massive difference and using your super to do so is an effective way to build your wealth that many people don’t always realise. One of the many benefits of an SMSF is that you can invest in property, something you cannot do with retail funds. 

Some of the benefits of investing in property through an SMSF include: 

  • Discounted or zero capital gains tax on your property. 
  • Tax benefits – superannuation contributions are taxed at 15% as opposed to marginal tax rate for a deposit saved outside super.  
  • Investment earnings taxed at 15% in super.  
  • Clients with an interest in property can invest in their chosen asset class using their superannuation – retail super funds cannot invest in property. 

The bottom line

An SMSF is a private super fund you manage yourself and with the help of professionals, giving you more control over how your retirement savings are invested. However, setting up an SMSF is a big decision that comes with ongoing legal compliance responsibilities, which can be costly and time-consuming. Ultimately, whether an SMSF is a good option for you depends on circumstances such as: 

  • Your current super balance 
  • Investment horizon – how much time you have until retirement and how long your super can be invested 
  • Occupation and income 
  • Your appetite and attitude to risk 
  • How much investment knowledge and time you have to manage your fund 
  • The type of assets you want to invest in. 

With our extensively experienced team, we are here to help you along the way, and answer any questions you may have. 

How do I proceed with an SMSF?

Now that you’re aware of what an SMSF entails, and what benefits there are to grasp, your next step is to speak to an experienced Financial Planner. Our team are here to guide you through the process and stick with you throughout the journey. We help with SMSF establishment and provide advice on the most suitable structure, as well as providing personal advice on the best investment strategy to meet your financial goals and needs. Contact us below to find out more.

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