Self Managed Super Funds (SMSFs)

Running your own super fund is becoming an increasingly popular strategy. This information is especially useful if you are currently a SMSF trustee, or are thinking about becoming one.

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Anne Fulwood talks to Graham O'Brien, ASX

There has been a huge change in the Australian financial landscape over the past decade - and much of this is about one segment of the investment community - the rise of the Self Managed Super Fund segment. Incredibly, more than 750,000 Australian have Self Managed Super – that is an increase of 50% in the past 5 years.

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Getting started

What is a Self Managed Super Fund?

  • Has less than 5 members;
  • Each individual trustee of the fund is a fund member;
  • Each member of the fund is a trustee;
  • No member of the fund is an employee of another member of the fund, unless those members are related;
  • The trustee can be a corporate entity;
  • No trustee of the fund receives remuneration for his or her services as a trustee; and
  • A SMSF is registered with, reports to and is regulated by the Australian Taxation Office

Setting up an investment strategy

The trustees of an SMSF are required to prepare and implement an investment strategy for the superannuation fund. The strategy must reflect the purpose and circumstances of the fund and take into account:

  • How to maximise member returns while having regard to the risk;
  • Appropriate diversification in a long term investment strategy; and
  • The ability of the fund to pay benefits as members reach retirement, and other costs incurred by the superannuation fund.

Trustees must make sure all investment decisions are made in accordance with the documented investment strategy of the fund and should seek investment advice or appoint an investment manager in writing if in any doubt.

Research

View research commissioned by ASX demonstrating the growth in popularity of SMSF and the current landscape in which they operate.

SMSF Education

ASX provides a range of online classes for people interested in investing in the share market.  These are general classes and are not SMSF specific.

Finding an SMSF adviser

What to look for:

  • Efficient low cost administration;
  • Full explanation of the requirements and responsibilities of trustees of SMSFs;
  • On-time annual reports plus performance updates and newsletters;
  • Availability - can you reach your adviser easily?
  • Competitive fees for investing, management & insurance premiums;
  • Clear detailed information on investment strategy, performance targets, investments and managing investment risk;
  • Track record for showing returns to trustees and all fees and costs;
  • No large outstanding legal claims or one-off costs.

SMSF Resources

There are a number of important sources of information on the establishment and maintenance of a SMSF.  We have put together the following useful links of organisations that are involved in self managed super.