News » What is a Self-Managed Super Fund (SMSF)?

March 19, 2024

As you contemplate your golden years, you might think about how to manage your retirement funds better. If you’re in Australia, there’s a popular term you’ve probably come across – self-managed super fund (SMSF). 

So, what is an SMSF? 

In this article, Aspire2Wealth adviser Nathan Torre explores the nuances of self-managed super funds, their benefits, how they work, and whether they are a good fit for your retirement strategy. We’ll unpack the verbose financial terminologies in a conversational tone, making it easy and interesting for you to understand the ins and outs of SMSF.

It’s never too early or too late to start planning your retirement. And if you’re considering an SMSF as part of your retirement plan, you’re in the right place. 

What is an SMSF?

A Self-Managed Super Fund (SMSF) is a personal superannuation fund under your management, standing apart from standard industry and retail super funds.

With an SMSF, the contributions typically made to a retail or industry super fund are instead directed into your self-managed fund, allowing you to personally select investments and insurance policies.

An SMSF is limited to a maximum of six members. As a member, you act as a trustee of the fund, or you can appoint a corporate trustee. In both scenarios, you bear full responsibility for managing the fund.

Is an SMSF worth it? Well, the allure of managing your own super comes with significant responsibilities and inherent risks. Establishing your super fund should only be considered if you’re fully dedicated and comprehend the implications and requirements.

How Does an SMSF Work?

An SMSF is about taking control of your retirement funds, but it involves a bit more complexity than simply managing a savings account. 

Initial Set Up

Establishing your Self-Managed Super Fund (SMSF) properly is crucial to ensure it qualifies for tax benefits, can accept contributions, and is manageable.

To successfully set up an SMSF, you should:

  1. Think about engaging with professionals for assistance.
  2. Decide between individual trustees or a corporate trustee.
  3. Nominate your trustees or directors.
  4. Establish the trust and formulate the trust deed.
  5. Ensure your fund qualifies as an Australian super fund.
  6. Register your fund and obtain an Australian Business Number (ABN).
  7. Open a dedicated bank account.
  8. Acquire an electronic service address.
  9. Develop a strategy for winding down the fund if necessary.

Record-Keeping Duties

Maintaining accurate financial records, lodging annual returns with the ATO, and arranging an annual audit by a licensed auditor are also key aspects of managing an SMSF. 

Ongoing Responsibilities

An SMSF operates under a trust structure with clear rules laid out by the Australian Tax Office (ATO). These rules ensure that your super fund is working hard to secure your retirement and is not being used for immediate financial gains. 

An SMSF involves exploring investment strategies and diversification to maximise returns and minimise risk. You’ll need time, skills, and a level head to manage your investments wisely. Getting your investment strategy right for your SMSF isn’t a set-and-forget action. It’s a dynamic process that demands constant attention and periodic adjustments in response to changing market conditions. 

For personalised support, book a consultation with a specialist financial adviser.

What are the Benefits of SMSF Structures?

There’s no denying that the benefits of an SMSF can be alluring, especially when considering the measure of control and flexibility they provide. But remember, with great power comes great responsibility—managing an SMSF requires skilful handling, due diligence, and a notable degree of care. 

Let’s move on to evaluate if an SMSF is worth it for your financial future.

Investment Control

One of the chief attractions of a Self-Managed Super Fund (SMSF) is the control it gives you over where your superannuation investments go. You can tailor your investment strategy per your preferences, considering your retirement goals, risk appetite, and knowledge of asset classes. 

Broader Investment Options

Regarding asset classes, SMSFs open a wider range of investment options beyond those available with traditional super funds. You can choose from a plethora of assets, including, but not limited to, shares, property, and collectibles, depending upon what makes the most sense for your retirement strategy and personal preferences. 

Full Transparency

With an SMSF, you’re in the driver’s seat. This implies full transparency and comprehensive oversight of your fund’s performance. You can regularly review and make necessary adjustments to ensure your investments align with your financial objectives. 

Pooling Funds for Increased Purchasing Power

An SMSF allows for pooling of up to six members’ superannuation funds. This can boost purchasing power and open doors to previously unattainable opportunities, such as investing in high-value assets like property. 

Tax Advantages

SMSFs offer potential tax benefits over traditional super funds. With concessional tax rates, the capacity to claim deductions for certain expenses, and the opportunity to minimise tax liabilities, an SMSF can significantly boost your retirement savings. 

Develop a Tailored SMSF Investment Strategy with an Industry Expert

Discussing SMSF investment with Financial Adviser

With all that we have discussed above, it is of significant importance that you develop an SMSF investment strategy that meets your goals, lifestyles, operations, and so on. 

Your investment plan should primarily address how your SMSF will meet its investment objectives and members’ retirement goals. Doing so could entail exploring diversification, plotting asset allocation, or the finer details of how funds will be invested. 

But first, ensure it’s a strategy developed with your needs in mind. This is where it becomes critical to get some real expert advice. Engaging with industry experts such as SMSF advisers, financial planners, or accountants can add immense value to your SMSF’s investment strategy. They can provide you with the necessary economic and legal knowledge, as well as guidance to comply with the SMSF’s documented investment strategy. 

Contact Aspire2 Wealth Advisers to Learn More

Aspire2 Wealth Advisers offer expert advice to ensure you’re better equipped to navigate the intricacies of an SMSF, allowing you to focus on the reward – a secure and comfortable retirement. 

For more information, speak with our specialists today.


This content contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser (Aspire2 Wealth Advisers, 08 9322 7028), and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments. Please contact us if you want more information.