In Australia we are able to place our personal superannuation contributions into an independently managed superannuation fund or a self managed superannuation fund (SMSF).
A SMSF is just one way to manage your superannuation benefits and can also be known as DIY funds. They operate the same way as other funds in that they invest the contributions and make them available to members on retirement.
The difference is that the members of SMSFs are the trustees – which mean that they control the investment of their contributions and the payment of their benefits. With all members being trustees, they are in a position to ensure their interests as members are protected.
Deciding to establish and run a SMSF is an important decision. Everybody’s circumstances are different and could range from the need to acquire a commercial property from which you may operate your business, or to have more control over your share portfolio.
Some things to think about might include the financial and time burdens of operating a SMSF. You also need to consider your responsibilities as a trustee to comply with the legislation and whether you have sufficient funds to make it viable. You also need to ensure that you have the appropriate combination of asset levels, investment diversification and expertise to manage the fund successfully.
It is very important to remember that there are strict investment rules when operating a SMSF. The fund also must have a strictly adhered to Investment Strategy which needs to be documented and approved by the trustee. To successfully operate and manage you SMSF you will need to engage the services of a tax agent and auditor who can also advise you on the costs of maintaining your own SMSF.
The above advice has been prepared without taking account of your objectives, financial situation or needs. You should consider the appropriateness of this advice. Before making a decision to acquire a financial product you should obtain a Product Disclosure Statement.
