In the past, most people invested their Superannuation in Retail or Industry Superfunds to which their employers contributed a percentage of their salary.

Fund managers then made investment decisions on behalf of the members of those Funds.

This landscape has dramatically changed in the past 10 years, with over 1 million Australians having switched from Retail or Industry Funds to SMSFs. The reasons for the change include the additional control over their Super and potentially lower fees. Now let us have a closer look at the advantages that an SMSF can offer.

1. Take back total control of your Super

An SMSF gives you total control of your Super by allowing you to choose where you invest your Super Benefit. Many of our clients who are disappointed with their Superfund's performance or simply think that they can do a better job investing their Super Benefit themselves are choosing to establish and manage their own SMSF.

Having total control means the members of the SMSF can invest in a wide range of investments. For example, with an SMSF, you can invest in Term Deposits, Australian and International Shares, Residential and Commercial Property.

2. Manage up to 4 members' Super in one SMSF

You can set up an SMSF for yourself and add up to three other people and consolidate the super balance from each member into one SMSF. This enables you to reduce the average fee per member to run an SMSF given our annual fee is the same for 1, 2, 3, or 4 members.

3. Accumulation and Pension Funds in one

With Retail and Industry Funds your benefit is typically invested separately in a Pension or an Accumulation Account. This means that when you wish to drawdown your Super Benefit as a Pension your Super Benefit will need to be transferred to a separate Pension Account and any additional contributions you make will be added to a completely separate Accumulation Account. An SMSF is a Pension and Accumulation Funds in one. You can commence a Pension and continue contributing to the same SMSF. There is no need to split your Super Benefit into multiple Funds.

4. Transfer assets from your personal name to an SMSF

It is possible for Members to make contributions of assets instead of cash such as Shares, Managed Funds, and Commercial Property from the Members' personal names into an SMSF (called in specie contributions). In specie transfers allow you to consolidate your Family Assets under the one SMSF tax advantaged umbrella. We note that taxation and capital gains tax issues should be considered.

Before you start

An SMSF can be a great vehicle to take back control of your Super but an SMSF may not be right for everyone. We have conveniently summarised other factors to consider when contemplating setting up an SMSF. We also assist you in understanding what is involved in the ongoing management of your SMSF.

If you want to learn more about SMSFs, please contact us today.


Disclaimer: This is general information only and should not be relied upon without first seeking advice from the Wealth Management Division at Kidmans Partners. This document has not taken into account of your individual objectives, financial situation or needs. While care has been taken in the preparation of this document, no liability is accepted by Kidmans Partners and its related entities for any loss arising from reliance on this document.

Kidmans Partners NowInfinity Legal