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Should I set up my own self managed super fund?

Benefits of setting up a SMSF

 For an ever increasing number of Australian’s looking for greater control and value from their superannuation, the Self Managed Super Fund (SMSF) appears to be becoming  the retirement vehicle of choice.

Choice of Investment and control

The SMSF will generally be able to invest in an extensive range of investments available to Australian investors including investments not always available in other types of superannuation funds, such as investment properties, direct Australian and international shares and direct fixed interest. The Trustees may choose to seek the assistance of a financial adviser to assist in selecting the most appropriate investment strategy to meet member’s investment needs.

Tax Control

Another major benefit  is the control and flexibility that trustees have over the tax position of the fund. Through either strategic investment planning (such as maximising franking credits) or internal structuring, tax can be significantly reduced (and in some cases, totally eliminated with refunds paid from the ATO), particularly for those in retirement.


Borrowing in super is becoming increasingly popular and a few years ago new rules were introduced which allowed superannuation funds to borrow money under a particular type of arrangement. These new rules can be fully utilised by SMSFs. This ties in with the “Investment choice” benefit mentioned above, whereby this now makes it much easier for trustees to acquire direct property in their SMSF as property is usually a big ticket item, and generally requires an element of borrowing.

Fees and Costs

For many people the cost of running an SMSF can be significantly lower than that of an alternative retail, industry of other commercial super fund. This is because administration costs of a self-managed fund are more or less fixed – no matter the fund balance. The main cost for a SMSF is the completion of the annual administration requirements of the fund.

Commercial super funds on tend to charge as a percentage of your fund balance, with a range of around 1% to 2% pa depending on the fund.  Secondly, the cost is the same for multiple members (up to 4). Therefore you are not paying 4 separate fees but the one fees for the annual administration of the superfund.

Pension Planning

For those members nearing the pension phase, the SMSF allows the most seamless transition from accumulation into pensions with a flexible income stream. As with all Super funds, the ability to take tax free income streams on retirement is a big incentive to stay within the superannuation environment, and as seen by the above benefits, the SMSF offers a lot of flexibility in terms of how you go about it.

Estate Planning

Not so well known are the estate planning benefits inherent in SMSFs, and the fact that your Will does not necessarily control your superannuation benefits. The key here is that you can create a strategy to achieve exactly what you are after, with greater tax efficiency.

Secondly, by introducing younger members of a family to a SMSF, you can pass on tax effective benefit payments to dependants.


SMSFs are able to claim deductions for insurance premiums paid out of the fund. SMSFs provide the ability to package very tailored insurance solutions for members over and above the standard schedule based solutions offered in many larger funds.

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