Is an SMSF right for you?

A self-managed super fund (SMSF) puts you in control of your retirement savings. Instead of letting an industry or retail fund manage your super, you and fellow members act as trustees (or set up a corporate trustee) and decide how your super is invested.
But the increased control comes with greater responsibility — and greater risk.

What you’ll be responsible for

If you opt for an SMSF, you’ll need to:

• Act as a trustee, meaning you make all decisions about the fund and are legally responsible for them.
• Understand that if things go wrong — for example theft, fraud or poor investment performance — you may have no access to government-compensation schemes that cover typical super-funds.
• Ensure you comply with superannuation and tax laws, maintain accurate records and organise annual audits.
• Be comfortable with the time and cost involved — trustees spend on average more than 8 hours a month managing an SMSF (over 100 hours a year) and there are setup and ongoing costs (accounting, auditing, legal, investment management, etc.).

When an SMSF might suit you

MoneySmart highlights that an SMSF might be appropriate if you:

• Are willing and able to actively manage your super-fund affairs.
• Fully understand your role as trustee and the responsibilities that come with it.
• Believe that the benefits of an SMSF — in investment flexibility or structure — will actually help you meet your retirement goals and that it’ll be cost-effective for your situation.

When it may not be right

Conversely, an SMSF may not be suitable if you:

• Don’t have enough time, interest or expertise to manage investment strategy and compliance.
• Have a smaller super balance where the fixed costs and workload of running an SMSF may outweigh the benefits.
• Are not sure about the legal and financial implications of being a trustee.

Next steps if you’re considering one

• Research: Look into investment options, restrictions under law, and your suitability. MoneySmart recommends checking the Australian Taxation Office (ATO) site for info on SMSF expenses and obligations.
• Get advice: Engage a licensed financial adviser experienced with SMSFs, so you understand:
  • Why an SMSF is (or isn’t) suitable for you
  • The risks, costs and ongoing commitments
  • How to structure the fund (individual trustees versus corporate trustee)
• Decide carefully: It’s not just setting up a fund — it’s managing it for the long term, ensuring compliance, investing wisely, auditing annually, reviewing investment strategy and record-keeping.

Why this matters

Superannuation is a major part of your financial future. Choosing the right structure matters. An SMSF gives control but also demands active management. If not handled properly, it could result in more risk and cost than reward. As MoneySmart states, “Only set up your own super fund if you’re 100% committed and understand what’s involved.”

Contact our office on 03 9848 5933 to speak to one of our accountants for further information or guidance in setting up a Self-Managed Super Fund.

Source: moneysmart.gov.au