Self Managed Superannuation Funds – Issues to consider
Self Managed Superannuation funds (SMSF) are growing in popularity as investors become more sophisticated and aim to have greater control over their retirement savings.
Investors should however, consider several issues when opting to self manage including:
- The high level of compliance required to satisfy:
- The Superannuation Industry (Supervision) Act 1993
- The ATO as the regulator, and
- The fund’s auditor.
- Annual charges which may range between $2000-$3000 for an average sized fund, including administration, accounting, tax and audit fees.
- The time required, and investment expertise needed to properly manage the investments. In the current investment climate of reducing asset values, these issues will come to the fore.
- The question – would a professional fund manager be able to obtain higher investment returns than the trustee of the fund.
After considering these issues you may still decide the cost of compliance is less than the fees charged by both insurance companies and industry funds.
If you have the time and expertise to devote to properly manage your investments, and you have advisors that you can call on as needed, setting up a SMSF may be your best option to earn reasonable returns on your investments.
Regardless of which decision is taken, it should be an informed decision. Contact your Chartered Accountant to discuss the compliance costs and taxation benefits of setting up a Self Managed Superannuation Fund.
