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Self Managed Super Funds (SMSFs)

Updated: Mar 20


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Self-managed super funds (SMSF) are one of the options for saving for your retirement.


SMSFs differ from other kinds of superannuation funds because their members are usually also the trustee of the fund. This means that the members themselves run it for their own benefit and making them responsible for complying with both tax and super fund laws.


Many people are drawn to SMSFs because they can control their investments and therefore their financial future. However, it is also important to understand the amount of work that is involved in managing a SMSF, as well as some of the risk and the ongoing commitment required to administer the fund. The ATO provides comprehensive information on setting up a SMSF.


What are the benefits of a SMSF?


There are several benefits of a SMSF, including but not limited to:

  • Being in control of the investment decisions

  • More flexibility in investment choices than in other types of funds because you can invest in diverse assets like property or collectables

  • You can tailor your investments to your unique retirement needs, personal goals and your appetite for risk

  • The ability to merge your superannuation funds with up to five other members may reduce management costs and increase the scale of the fund

  • Exercising more control over the tax implications of your investment

  • Listed shares, business properties or similar personal assets can be transferred into your SMSF as part of your Capital Gains Tax strategy and to increase your retirement savings

  • Certain types of life, total and permanent disability, and income protection insurance can be accessed through SMSF

Many owners of small and medium businesses benefit from SMSFs because they can use their business assets to improve their retirement savings and access various tax concessions. You may be young and feel that retirement is on a distant horizon, however, acting early to secure your financial future will deliver great benefits in the long term.


What are the risks and responsibilities associated with SMSFs?


Venturing down the path of SMSFs comes with risks and responsibilities. Every member of a SMSF is responsible for the decisions the fund makes and they are required to comply with the law. You may be liable to pay administrative penalties if laws relating to SMSFs are not followed as an individual trustee or as a director of a corporate trustee. You will have to complete a Trustee declaration if you become a trustee or director of a corporate trustee of a new or existing SMSF.


Some of the risks are:

  • You won’t be able to access the Australian Financial Complaints Authority (AFCA) nor any special compensation schemes should you lose money because of theft or fraud

  • Regardless of whether you get help from a professional advisor, e.g. financial advisor, accountant or lawyer, or another member of the fund made the decision, you are still personally liable for all the fund’s decisions

  • You are responsible for managing the fund regardless of how your circumstances may change, e.g. losing your job

  • Investments may not always bring in the expected returns

  • Managing a SMSF can be challenging when relationships between members break down, or if a member becomes ill or passes away

  • It’s not always possible to keep insurance plans when moving from an industry or retail fund to a SMSF


What tasks are involved in managing a SMSF?


There is a significant amount of work and time involved in managing a SMSF. Even if you engage professionals to help you. Apart from the initial time required to set up a fund, you will need to regularly:

  • Review your investment strategy to keep your fund on track

  • Research investment options

  • Stay abreast of both superannuation and tax laws

  • Keep accurate records, manage accounting and other administrative duties

  • Lodge SMSF annual returns and make sure an audit is done each year by an approved SMSF auditor


How much time is involved in managing an SMSF?


Research has shown that on average, trustees spend more than eight hours a month managing their SMSF. To lend even more perspective, this means about 100 hours per year.


What costs are involved in an SMSF?


There are costs involved in both setting up and running an SMSF, and they include both out-of-pocket expenses and some which may be tax deductible. These costs could include:

  • Legal advice

  • Tax advice

  • Investments

  • Accounting

  • Insurance

  • Financial advice

  • Auditors’ services


How are SMSFs regulated?


SMSFs are regulated by the ATO. They focus on helping trustees to comply with their legal requirements and provide comprehensive information on their website. Their aim is to protect the retirement savings of the funds members and they can act against SMSFs that don’t comply with the regulations. Trustees can undertake to rectify any contraventions following the ATO specified processes, or they could face administrative penalties, risk being disqualified and even face civil and criminal penalties.


How can ABA Advice Beyond Accounting help you?


At ABA Advice Beyond Accounting our team is experienced in managing SMSFs. The benefit of working with us is the consistent and detailed support you will receive to improve your future financial position with clear advice, proven strategies, and superannuation management.


When we partner with you, we first seek to understand your unique situation and long-term goals. Then assist you to administer and manage your SMSF. This includes maintaining accounting and member records for you, as well as preparing annual pension fund paperwork and financial statements to maintain your portfolio records in good order.


We are committed to reducing the stress involved in SMSFs, ensuring your fund is ATO compliant and most importantly, that your fund delivers growth on your investment.


Contact us today and speak with an ABA SMSF Client Advisor to improve your financial future.



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