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Self-Managed Superannuation (SMSF) 101

1. What is an SMSF?

2. Benefits of having an SMSF

3. What do I need to consider before starting an SMSF

4. What will an SMSF Cost?

5. Common Investments in SMSFs

6. How do I set up an SMSF?

Contents

1. What is an SMSF?

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An SMSF is a type of Superannuation fund where you, as a trustee and members, have responsibility over the management, investment and administration of your fund.

SMSFs are quite different from other super funds because they give you total control over how your Super balance is invested. SMSF’s open up a world of investment options that may not be accessable in a retail or industry fund.

An SMSF may be appropriate for someone who wants to take their retirement goals seriously and prefers to make their own investment choices, rather than leave their Superannuation to be invested by fund managers.

SMSF’s are run by you, for you and any other members of your SMSF and are established for the sole purpose of building retirement savings.SMSF structures can be quite complex depending on the asset classes you invest in. There's a lot to consider, but partnering with qualified professionals like Future Assist save you time and the administrative burden to free you up to focus on making the decisions.

SMSF structures can be quite complex depending on the asset classes you invest in. There's a lot to consider, but partnering with qualified professionals

save you time and the administrative burden to free you up

2. Benefits of SMSF:

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1. Control: SMSF assets are controlled by you (the trustee/s), who can choose exactly what the fund invests in. This includes direct residential or commercial prop-erty, direct equities, Cash, Gold and many other asset classes, with the possibility of gearing into these investments.

2. Flexibility: Trustees have the flexibility to make decisions regarding investments quickly (for example when the market is moving), and select options for securing your retirement income streams.

3. Families: SMSFs may provide advantages in a family situation where up to four mem-bers are trustees and contributing towards your family SMSF.

4. Taxation: A self-managed super fund enjoys one of the lowest rates of tax of any entity structure in Australia. This can prove very advantageous when invest-ing for the purposes of retirement.

5. Direct Asset Investment: A large motivating factor of setting up an SMSF for a lot of Australians has been the possibility of direct equity and property investment.Residential and commercial property investment is one direct asset class which is not available inside retail and industry funds. Nor is the ability to use your superannuation as leverage to borrow funds and invest in residential or commercial property. Many Australians prefer to invest in property because they are comfortable with it. Chances are they own or are paying off their own home and know and understand the market better than equities, precious metals, bonds or any other investment class.

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3. What do I need to consider before starting an SMSF: starting an SMSF:

There's a lot to consider before you decide to set up an SMSF. This includes, among other things, your super balance, your current and future super contributions, the number of members joining the fund and their ages, how much time you have to spend on your SMSF, your retirement goals, investment preferences and your risk profile. The Australian Tax Office’s first recommendation on their website for someone wanting to consider an SMSF is ‘it is strongly recommended you seek professional advice and assistance’ to set up your SMSF. Such as an adviser or accountant, both of which you can get access to as a client of Future Assist.

All circumstances are different, however generally you need to have a reasonable amount of super, or be looking to build up your super quite quickly, to justify the costs of an SMSF. Everyone has a different view of 'how much' money is enough to start a SMSF, and there is no legal minimum.

As an SMSF trustee, it is important that you are aware of and understand the duties, responsibilities and obligations of being a trustee. You will need to ensure that your fund operates in accordance with all applicable laws. You will also need to be aware of and follow the rules set out in your fund's trust deed.

You need to be comfortable making investment decisions around when, where and how to invest or consider working with an adviser to help you. In particular, you should seek advice around borrowing if this is of interest to you. Depending on your circumstances, gearing in your super may or may not be appropriate.Future Assist is a Full Services accounting-based financial planning firm who help shoulder the burden of administration and compliance, releasing you to make informed investment decisions.

The average SMSF trustee in Australia spends 2 – 3 hours per week administrating their SMSF. The average Future Assist client spends about 3 hours per year on administrational obligation. You should consider discussing your situation with a Future Assist adviser before deciding if an SMSF is right for you.

At Future Assist, we ascertain your retirement goals and desired investment asset classes, then assess these against the ongoing administration costs to ensure your administrational costs do not overshadow your funds performance.

4. What will an SMSF cost?

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The costs of setting up and running an SMSF vary depending on, among other things, your circumstances, super balance, investment strategy and how you choose to manage your fund. The more complex you make it, the more it is likely to cost.

However, with this said, the difference between an SMSF and a retail or industry fund is the fact that SMSF’s operate on a fixed annual fee, as opposed to an ongoing percentage of your fund balance.

In certain cases, SMSF’s have lower associated fees compared to other super funds. Future Assist Accountants administer SMSFs on a fixed annual fee, as opposed to most funds that operate on a percentage of your total balance. With Future Assist, the more your super grows, the more economical an SMSF will become and the more expensive it then becomes to leave it other super funds who charge on a percentage basis.

4. What will an SMSF cost?

The costs of setting up and running an SMSF vary depending on, among other things, your circumstances, super balance, investment strategy and how you choose to manage your fund. The more complex you make it, the

However, with this said, the difference between an SMSF and a retail or industry fund is the fact that SMSF’s operate on a fixed annual fee, as

In certain cases, SMSF’s have lower associated fees compared to

SMSFs on a fixed annual fee, as opposed to most funds that operate on a percentage of your total balance. With Future Assist, the more your super grows, the more economical an SMSF will become and the more expensive it then becomes to leave it other super funds who charge on a percentage basis.

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5. Common Investments in SMSFs:

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Superannuation law doesn't specify the various types of investments for super funds, however the Superannuation Industry (Supervision) Act 1993 requires trustees to comply with a number of duties and obligations when

The general process of setting up an SMSF involves:

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�� :L[[PUN�HU�PU]LZ[TLU[�Z[YH[LN �̀�HUKThere are a few other things that you need to consider and put in place to become fully compliant.

Future Assist is uniquely set up to help you with this process. Future Assist utilise integrated accounting and financial planning departments to be able to offer compliance peace of mind as well as investment advice.

For more information on how the set up process works, contact us today: 1300 118 618

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Future Assist Financial Services Group Pty Ltd (ABN 24 151 337 843, AFSL No. 413674)

There are a few other things that you need to consider and put in

Future Assist is uniquely set up to help you with this process.

mind as well as investment advice.

For more information on how the set up process works, contact us today:

The general process of setting up an SMSF involves:

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�� :L[[PUN�HU�PU]LZ[TLU[�Z[YH[LN �̀�HUKThere are a few other things that you need to consider and put in place to become fully compliant.

Future Assist is uniquely set up to help you with this process. Future Assist utilise integrated accounting and financial planning departments to be able to offer compliance peace of mind as well as investment advice.

6. How do I set up an SMSF?

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Sydney | Melbourne | Brisbane | Southport

Phone: 1300 118 618

www.futureassist.com.au/smsf-questions

General Advice Warning

The contents of this e-book are of a general nature only and have not been prepared to take into account any particular individual’s objectives, financial situation or particular needs. Future Assist is a licensed financial services group (AFSL No. 413674) with financial advisers able to advise you on many financial products, however this needs to be done through an initial consultation to ascertain your overall situation to ensure the accuracy of advice.

We also recommend that you should seek professional advice from a financial adviser before making any decision to purchase any financial product referred to in this e-book. While the sources for the material are considered reliable, responsibility is not accepted for any inaccuracies, errors or omissions.

Phone: 1300 118 618

info@futureassist.com.au

www.futureassist.com.au/smsf-questions

Speak to an adviser today! Your initial consultation is complimentary:

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