Zannettou & Co

Self-managed super funds

Self-managed super funds can provide benefits to its members upon retirement and their beneficiaries. This is a superannuation trust account which is different to other super funds because it allows members of the self-managed super fund to also be trustees of the fund. Self-managed super fund trustees are responsible for making investment decisions and ensuring implementation of an effective investment strategy for your super fund.

The number of self-managed super funds have grown exponentially over the last 10 years. Driven by the global financial crisis, people wanted to have more control and understanding of what their retirement money within superannuation was doing. In addition, the government introduced borrowing from a self-managed superfund which if certain criteria are met an investment property can be purchased within a self-managed superfund. This has become a very popular option for investors looking towards securing their financial future. As Australians, we do love bricks and mortar and this is another investment vehicle that allows clients to purchase more investment properties.

Advantages

This will allow you to have complete control over the self-managed super fund, allowing you to control your retirement funds and how they are invested.

You can switch or modify the investments as you see fit, these investments may include bank deposits, direct property, shares, investment trusts or managed funds. Self-managed super funds allow flexibility when you move from job to job and/or generation to generation.

Self-managed super funds with large balances may have lower fees than many large super funds, depending on the circumstances. Self-managed super fund members are not liable for fees based on the percentages of your investment allowing you to save big. A self-managed super fund cost does not increase when you super investment grows, this will be cost effective when your account balance increases.

Self-managed super fund members can be the trustees of the superfund which can allow a degree of control over the rules and operations of the super fund and there can be specific rules introduced for your payment benefits.

Self-managed super fund small business owners are able to invest in business property either directly or through non-geared unit trusts or warrant trusts and leave back the property to a related party.

Self-managed super fund can provide tax concessions such as deferral of lump sum tax in the pension phase.

Things to know

The Trustee is responsible for all the decisions with managing the self-managed super fund. All superannuation funds must comply with certain legislation and deadlines. Breach of any legislative requirements can result in penalties.

Self-managed super funds allow greater range of investment of assets, however there may be insufficient money to fund the diversified assets. This will need to be monitored and managed through the investment performance of your fund.

Self-managed super fund members will not able to bring complaints or disputes to the Superannuation Complaints Tribunal, they will need to bring any matters to the Courts which may become expensive and result in delays.

Self-managed super fund members should understand basic investment practices. Understanding how a diversified investment portfolio can spread potential returns and risks is critical. This will allow members to understand how excessive investment costs and taxation can erode return.

Operating your own self-managed super fund is quite time consuming and demanding. Depending on the types of investments are in the fund or the administration and consulting assistance you receive, it may be expensive to maintain the self-managed super fund.

Self-managed super fund small balances are generally not nearly as cost effectives compare to larger balances. Members should always compare costs with larger super funds before setting up a self-managed super fund.

Get a free quote calculation

  • Working with experienced and qualified accountants like Zannettou & Co provides you with a full range of services for all self-managed super funds. Self-managed super funds can hold other investments as well and the investments may not suit everyone’s personal situation. Self-managed super funds do tie in with financial planning advisory and should be looked at as part of an overall strategy when considering your personal circumstances. Please contact us at Zannettou & Co to organise an obligation free consultation to discuss whether setting up a self-managed super fund is right for you.