SMSF allows you to directly control and manage your superannuation – you make the investment decisions and you need to ensure the rules are followed.
SMSF is great for some people but they are not suitable for everyone. Below are some points that may help you to make your decision:
Is SMSF right for me
Before you decide to set up a SMSF you should think about whether it is suitable for your personal needs, objectives and financial circumstances.
Your objective
Will your objectives be best met by a SMSF?
Sufficient superannuation savings
You will need to determine whether you have enough in superannuation for a SMSF to be cost-effective and achieve investment diversification. There is no prescribed minimum amount required to set-up a SMSF.
Opinions vary as to how much superannuation money you need to make a SMSF effective. As your fund balance increases, it reduces the relative costs. For example, ASIC highlight whether it is cost-effective for a SMSF if the starting balance is below $500,000. See ASIC media release (October 2019).
A SMSF may have up yo 4 members, and it can be the sum of superannuation from these 4 members.
Financial knowledge
Generally, you will need to have some financial knowledge and experience or use a financial adviser to assist you in running your SMSF.
Time
You will need to dedicate some time to making sure your SMSF is properly managed and records are kept in order.
You can employ an financial adviser to help you with your SMSF.
No compensation scheme for SMSFs
There is no government compensation scheme for SMSFs. No government financial assistance is available to SMSFs for fraudulent conduct or fraud.
Superannuation Accounting do not provide personal financial advice, and is unable to provide personal advice to you about whether a SMSF is suitable for you. If you are unsure, you should obtain advice from a licensed financial adviser.
