What is an SMSF and what are the benefits?

Today, more than 1.1 million Australians manage their own superannuation through Self-Managed Super Funds (SMSFs) with nearly 600,000 total funds, and the numbers are steadily on the rise.


For the right candidates, SMSFs offer attractive benefits – from investment control, to estate planning benefits, and effective tax management to name a few.

With greater visibility on your retirement savings, and better insight into how your overall wealth is tracking, an SMSF can help give you confidence in your investment and lifestyle decisions.

What is an SMSF?

An SMSF is a small superannuation fund set up for between one and four members with each member of the fund also acting as a trustee of the fund (individually or as a director of a corporate trustee).

As a trustee, you are responsible for the investment and management of the fund. If you choose an SMSF, you will be your own investment manager and responsible for making all the investment and administration decisions.

What are the main benefits of an SMSF?

These are some of the benefits of an SMSF:

Greater investment choice

SMSFs offer a wider range of investment choices than other superannuation solutions. While there are some rules and exclusions, SMSFs can invest in any assets that are permitted by superannuation laws, such as unlisted shares, direct property, and initial public offerings.

SMSFs can be especially attractive for business owners, as an SMSF can purchase a commercial property and rent it to your business at the prevailing market rates.

Effective tax planning and management

SMSFs have the same tax rates as other superannuation funds, but with an SMSF, you have more influence over tax strategies and outcomes. Many other super funds account for tax on a pooled basis, but SMSF tax is generally accounted for based on your account’s specific transactions.

Investment performance transparency

Due to their size, many industry and retail super funds do not report on their investment performance until many months down the track. However, with an SMSF, you will be more aware of how your funds are invested, and how they are performing.

Control and flexibility

SMSFs are nimble and can quickly adjust to legislative developments, new tax strategies, and an individual’s changing circumstance. These occasional changes in superannuation law are often beneficial. As an SMSF member, you are also a trustee – meaning you have flexibility to tailor the rules of your SMSF to suit your specific needs and the other SMSF members’, unlike other superannuation funds.

Pooling your super

An SMSF allows you to pool your super with up to three other people, giving you the opportunity to make investments you otherwise could not have on your own.

Is an SMSF right for you?

There can be many advantages to setting up your own SMSF, but it is also a big responsibility and it may not suit everyone. Managing a SMSF takes time, money, skill and knowledge and you should carefully consider your decision and seek professional advice before you set up a SMSF.

Find out whether an SMSF may be right for you. Alternatively, contact us today to discuss your SMSF needs.

Disclaimer: This information is general in nature and should not be relied on as advice. 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 and seek professional advice before making any decisions based on this information.

Find out if an SMSF is right for you