What are SMSF’s?

We all value freedom of choice and having control of our finances – an SMSF can offer these to a far greater degree than any retail or industry fund that currently exists.

Typically when you set up an account with a large retail/industry fund, you are offered a selection from a shortlist of investment approaches or portfolio types and at that point, hand over control of your investment to an adviser.

Understandably, this is the only efficient way of large funds handling your super and perfect for many people who, perhaps, don’t have the time or interest in managing their own superannuation. It’s usually a cheap and simple way to build retirement assets over the long term.

For some though, an SMSF is attractive because it opens up opportunities to invest directly in specific shares, managed funds, ETF’s, unlisted investments or real property, maybe even jointly with business partners or related parties.

An SMSF is effectively just a trust that has to abide by specific laws and, importantly, must exist for the sole purpose of providing for retirement (rather than wealth creation), but it is still the most tax effective investment vehicle available in Australia today. The downside of using an SMSF as an investment vehicle is that gains are potentially locked away for a while (i.e. until retirement), but the cumulative tax benefits are a good incentive, particularly when you are paying tax at the top rate.

If you’ve ever entertained the idea of running your own SMSF or are interested in exploring other investment options in your existing SMSF, come and have a chat to us.

There’s a lot to consider before you take the plunge and set up an SMSF so it’s important you know what you’re getting into. We can help with that.

RWK Accountancy partner with a local financial planning firm so that together, we can complete the picture for you.