Self Managed Super

Self Managed Super Funds

It’s no coincidence that interest in self managed superannuation has skyrocketed since the global financial crisis (GFC). The loss of investor confidence in superannuation fund managers combined with the lure of controlling your own financial destiny has seen an explosion in the number of Self Managed Super Funds (SMSF) in this country.

With almost $408 billion under management, SMSF’s are now the largest and fastest growing segment of Australia’s $1.28 trillion superannuation industry. That figure is triple what it was just five years ago and as at September 2010, there were about 434,000 SMSF’S funds with more than 830,000 members. This means that less than 3% of the 32 million superannuation accounts are in a SMSF but they own almost a third (31.9%) of all the assets. A recent survey suggests the average balance in a SMSF is much larger than mainstream accounts at nearly $488,000 each.

What Is A SMSF?

A self managed superannuation fund is a do-it-yourself superannuation fund of 1 to 4 members where each member acts as a trustee of the fund. Single member funds require two individuals as trustees or a single Company as a corporate trustee. Your SMSF must have its own bank account and a trust deed. The deed is basically the rules of operation of the fund and sets out who can be a member, how they’re admitted as a member, what the fund can invest in and who can receive a death benefit. An SMSF requires an annual audit plus they need to lodge an annual tax return with the Australian Taxation Office (ATO). It is therefore vital that your AFS licenced financial planner discusses the ongoing fees and you understand your legal obligations before you make a decision to establish a SMSF.