Self-Managed Super Funds.
Self-managed super funds can provide benefits to its members upon retirement and their beneficiaries. This is a superannuation trust account which is different to other super funds because it allows members of the self-managed super fund to also be trustees of the fund. Self-managed super fund trustees are responsible for making investment decisions and ensuring implementation of an effective investment strategy for your super fund.
Driven by the global financial crisis, people wanted to have more control and understanding of what their retirement money within superannuation was doing. In addition, the government introduced borrowing from a self-managed superfund which if certain criteria are met an investment property can be purchased within a self-managed superfund. This has become a very popular option for investors looking towards securing their financial future. As Australians, we do love bricks and mortar and this is another investment vehicle that allows clients to purchase more investment properties.
ADVANTAGES OF A SMSF
C O N T R O L
F L E X I B I L I T Y
C O S T S A V I N G S
D E S I G N & O P E R A T I O N
S M A L L B U S I N E S S A D V A N T A G E
T A X C O N C E S S I O N S
THINGS TO KNOW
The Trustee is responsible for all the decisions with managing the self-managed super fund. All superannuation funds must comply with certain legislation and deadlines. Breach of any legislative requirements can result in penalties.
Limited Ability to Diversify Your Investments
Self-managed super funds allow greater range of investment of assets, however there may be insufficient money to fund the diversified assets. This will need to be monitored and managed through the investment performance of your fund.
No Access to Superannuation Complaints Tribunal
Self-managed super fund members will not able to bring complaints or disputes to the Superannuation Complaints Tribunal, they will need to bring any matters to the Courts which may become expensive and result in delays.
Need for Investment Knowledge
Self-managed super fund members should understand basic investment practices. Understanding how a diversified investment portfolio can spread potential returns and risks is critical. This will allow members to understand how excessive investment costs and taxation can erode return.
Can be Time Consuming and Costly
Operating your own self-managed super fund is quite time consuming and demanding. Depending on the types of investments are in the fund or the administration and consulting assistance you receive, it may be expensive to maintain the self-managed super fund.
High Cost for Small Balances
Self-managed super fund small balances are generally not nearly as cost effectives compare to larger balances. Members should always compare costs with larger super funds before setting up a self-managed super fund.