Self-Managed Super Funds
A Self-Managed Superannuation Fund (SMSF) has become a popular way for many Australians to build wealth towards their retirement. It is a super fund with six members or fewer, where each member is also a trustee.
Trustees are responsible for the management, including the fund’s investment strategy,
administrative requirements and tax obligations.
The duty is on the trustees to abide by superannuation legislation and regulations, as well as the fund’s trust deed to guarantee it remains compliant.
By maintaining its compliant status, a SMSF retains eligibility for the tax concessions available to regulated superannuation funds.
Self-Managed Super Fund Benefits
The benefits of a Self-Managed Super Fund revolve predominantly around control and investment flexibility. There are also many other additional administrative and taxation benefits.
While many retail and some industry superannuation funds allow you to invest in a wide range of managed funds, ASX-listed shares and ETFs; only a SMSF allows you to invest in direct property, such as a residential investment property or commercial property.
A SMSF also allows you to choose any bank account, term deposit provider, managed fund or
shareholdings. Whereas retail or industry funds will limit your choice, based on their investment menu.
An SMSF is managed and run by the trustees and members of the fund. The day-to-day
operations and activities are not delayed by administrative processes, functionality and reliance on super fund staff members to process requests. SMSFs can make more tactical decisions, capitalise on opportunities and react quickly to legislative changes or economic events.
The other main benefit which is not available within other superannuation funds is the ability to borrow to invest in assets such as property and shares via a limited recourse borrowing arrangement (LRBA).
