Mike Reynolds
Mike Reynolds

Director / Adviser


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Four questions to ask yourself before setting up a self-managed super fund

SMSFs are increasingly growing in popularity, ten years ago they made up for 12 per cent of total superannuation – now that figure is at 30 per cent. It’s great to know SMSFs are becoming more popular but how can you know if it’s right for you? Here are four questions you should ask yourself when deciding if an SMSF is right for you.

Is my superfund of sufficient value to make it worthwhile?

The smaller the fund, the larger the costs – these include accounting, audit and annual lodgement fees which make up a percentage of the fund. An FMD adviser can help you accurately evaluate your current super fund to determine if an SMSF is suitable for you.

Have I got the time to be a trustee?

Managing an SMSF is time consuming because the trustee has ultimate responsibility for the completion of all relevant administrative and compliance tasks. These can be relatively onerous with members being at risk of facing severe penalties if they don’t run the fund within the confines of the law. If timely administration is not for you then an SMSF probably isn’t either.

Could I benefit from greater investment flexibility?

An SMSF provides the trustee with a greater level of control over investments – this includes the strategy and investment choice (for example, shares, property, Term Deposits and collectables) and investment choice (for example, a choice between investment strategies, rather than specific assets). SMSFs can also use borrowed money to invest in commercial and residential property via a limited recourse borrowing arrangement (LRBA). With more choice comes more complexity. Talk to an expert who can guide you through your investment choices.

Do I have the investment skills and knowledge to manage my own fund?

Managing a personal super fund is a risk; so it is vital the trustee is a confident investor and has access to their risk profile and expert advice when certain questions and needs arise. Discuss with an FMD adviser whether you’re prepared to take charge of your super fund.

Wondering if self-managed super is for you?

General advice disclaimer: This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained on this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Group Pty Ltd ABN 99 103 115 591 trading as FMD Financial is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977.