Switch to a Self Managed Super Fund

SMSFs (Self Managed Super Funds) have been gaining popularity over the last few years because they can give you greater control over your investments. But how do you know if an SMSF is the right choice for you?

When to Switch

You have a high super balance. If you earn a significant income or are nearing retirement your super balance might exceed $200,000. If this is the case you could benefit from a SMSF. Retail funds charge their fees as a percentage so as  your super balance grows your fees get higher. SMSFs are a little different. Fees for administering your SMSF are charged at a flat rate. As your super balance increases this fee will remain the same. This could save you a lot of money.

You want to invest in property. You generally cannot invest your super directly in property in a fund other than a SMSF. Investing in direct property with a SMSF means you can use your superannuation to fund a property investment.

Purchasing your business premises. Rather than leasing premises from a third party, you can purchase a commercial property through your SMSF and lease it to your business. Your rent then helps to fund your retirement.

You want more choice in what you can invest in. A SMSF allows you to invest in ways you can’t with other types of super funds. As well as property, you can invest in direct shares, hedge funds and artwork through a SMSF.


When not to use a SMSF

If you have had little interest in managing your super in the past. You may not have the knowledge or enthusiasm to properly manage a SMSF. There are a number of regulations that must be complied with when managing your fund which you are fully responsible for, even if it is administered by an accountant. Non-compliance can result in severe penalties including imprisonment. If you are not ready to take on this responsibility this is probably not the right type of fund for you.

You have a low super balance. The fees you will pay through your super may be much less with a retail fund if your super balance is quite low. Unless you have a particular reason to set up an SMSF it is usually best to stay with a managed superannuation fund.


Before you decide to set up a SMSF fund we strongly recommend you see a financial planner to assess your situation. Please call us on (02)4941 1888 to meet with one of our planners.

The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.