The “SMSF Revolution"

Over the last decade, what started as a trickle of interest in self-managed super funds (SMSF’s) has become a torrent. And now, thanks to Choice of Fund legislation, SMSF’s are set to become more prevalent.

SMSFs are now responsible for around $142 billion in people’s retirement savings and, by 2013, this is expected to grow to around $165 billion. Currently, there are around 300,000 separate SMSFs, holding the superannuation assets of some 560,000 Australians. And this growth phenomenon is widely tipped to continue, with SMSFs expected to be the ‘big winner’ from Choice of Fund legislation.

Why all the fuss?

For many high-income earners who already have a reasonably large amount of superannuation — typically more than $200,000 — SMSFs can provide greater control and more flexibility than traditional superannuation funds. SMSFs can also be more cost-effective than their institutional equivalents. Other advantages include:

    * greater investment choice, opening-up opportunities for investment in direct shares and business real property
    * control over your tax situation; allowing for the maximal use of funds throughout the financial year
    * greater estate planning control and insurance options
    * control over the timing of asset sales and selection.

On the other side of the ledger, with more than 2,500 pages of relevant legislation, SMSFs demand rigorous governance. And, as the trustee of your SMSF, you are ultimately responsible for the investment decisions and outcomes of the fund. You will need to understand the rules, and keep up-to-date with legislative changes to ensure you can continue to meet your responsibilities and obligations as the trustee. You will also need to arrange for regular auditing and account reporting so as to comply with government regulations.

Want more information?

Historically, accountants have been the first port of call for people looking to set up an SMSF. This is because they offer services from an auditing, compliance and tax perspective. However, most accountants are not legally qualified to offer investment advice and so the SMSF trustee is often left in the dark as to how to achieve maximum returns. Not surprisingly, the SMSF landscape is changing. Financial advisers are now stepping into the market, offering more holistic services that combine all the necessary elements for running a successful SMSF: quality financial advice, auditing, tax advice and trustee administration services. To determine if you would benefit from establishing your own SMSF, speak with your financial adviser today.

Disclaimer:

No investment advice provided to you.
This web site is not designed for the purpose of providing personal financial or investment advice. Information provided does not take into account your particular investment objectives, financial situation or investment needs.

You should assess whether the information on this web site is appropriate to your particular investment objectives, financial situation and investment needs. You should do this before making an investment decision on the basis of the information on this web site. You can either make this assessment yourself or seek the assistance of any adviser.
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