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Pros and Cons of Setting-Up Your Own SMSF

Pros and Cons of Setting-Up Your Own SMSF

Are you this person, who is not satisfied with the way your super funds are being managed? We hope you know that your control is not impaired and you can still take up matters in your own hands. Just so you know majority of the Australians hire superannuation professionals who invest and manage their super funds for a fee. But over 8 lakh super fund owners have taken control in their own; and the result? Well, it’s positive for some people and less so for some. Below are some pros and cons of managing your own super funds which would put you on the right perspective:


Cost saving:
You can undoubtedly save some thousands of dollars that was paid as fees for a superannuation company.
Tax saving:
The contributions you do to your super funds are tax exempt. Besides, the property you buy using this money would also let you pay taxes as little as 15%. You can also save more by focusing on franked dividend fund and the time you choose to realize your gains.
You will have a lot of options to choose from. For example, you can choose from mortgages, bank deposits, shares, direct property, and managed funds.
As you know, it is your money and you can invest on anything you see fit such as particular companies you wish, uber-safe fixed deposits with interests, or a nice beautiful house to live after retirement.
Use gearing:
You can make use of gearing to buy some properties or shares to let your investment grow at a faster pace.
You get to select from a suite of complete insurance options which includes trauma and life insurance.
Estate planning:
SMSF can continue eternally allowing your family members who are alive to benefit from tax advantaged income after your demise.
Low fees:
If your super fund exceeds $300000, you can operate your super in much lesser fee compared to the management fee charged by a superannuation company.


You need to be a pro at investing to make sure that your super fund is does better than the gains that could have been made by a conventional superannuation company. You can hire advisors to help you out with investing, but this again will cost you.
As a trustee you must be aware of the taxation and super law and comply with it. Failure to do so incur huge penalties and sometimes imprisonment.
Most Australians find it hard to stay updated with their super leave alone running their funds. You need to undergo a lot of paperwork right from setting your trustee powers in the deed, exit strategy, benefit payments, etc. You would also have to maintain all your records including your contributions and transactions, obligations reporting including your annual tax return. You can hire a professional to do this administration which will cost you some money; but that’s worth the cost.

For more details on managing your own SMSFs, call on us at +61 3 9034 9709.

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