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Why is everyone talking about SMSF?

You’ve probably heard a lot about SMSF and you’re wondering if it is a good option for you.

As we are receiving more enquiries about how to set up an SMSF and what it takes to run it successfully we have prepared a series of educational articles we will be publishing over the next few weeks.

Of course if you have urgent questions now, please don’t hesitate to book a call and ask.

Let’s start with the basics first…

What is an SMSF?

SMSF stands for a Self-Managed Super Fund.

This is basically your personal Superannuation Fund that gives you total control over how your Super benefit is invested.

It is ideal for “DIY Investors” who prefer to make their own investment choices for retirement rather than leave their Superannuation to be invested by others.

SMSFs may not suit everyone but generally paying more attention to your super is a good thing because it’s your money for your retirement.

Before you make any decisions first consider the facts so you don’t get yourself into something for which you are not well prepared.

What can an SMSF Do?

An SMSF performs the usual functions of a super fund such as:

  • accepting new superannuation contributions
  • paying a retirement income
  • investing contributions, following specific investment guidelines

What are the investment guidelines?

By law the trustees of SMSFs are required to implement an investment strategy, which clearly defines:

  • The return and the risk of chosen investments relevant to the investment environment
  • The assets profile make-up – how the assets are diversified
  • The assets liquidity and
  • The ability of the fund to meet current and future liabilities

These are not extra requirements.

Similar law legislates the investment activity of all Super funds registered in Australia.
SMSF’s must comply with the Superannuation Industry (Supervision) Act 1993 (“SISA”) and associated laws and regulations.

Having a sound investment strategy does require good financial and investment knowledge and skills, which shouldn’t be a deterrent for you if you want to manage your own Superannuation fund.

You just need a good financial advisor.

You are paying for one under your current Super Fund arrangement, so it is not an additional cost.

Speak to your financial advisor or ask us to recommend one if you don’t have one.

Find out more today and see if SMSF is right for you

Book a free SMSF call with me here.

I’ll be happy to answer all your questions.

Cameron McKenzie

Get more legal insights here.

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