What is a SMSF?

May 14, 2018

A self managed super fund, or SMSF, is most simply defined as a superannuation fund that is completely managed by the trustee. Still regulated and overlooked by the ATO (Australian Taxation Office), SMSFs provide owners and trustees with flexibility over their financial investments. This makes SMSFs a preferred choice for those wanting complete control over their financial future.

Self managed funds can be obtained easily, and the benefits of having so much control make them a widely popular choice. However, when working with a SMSF, it’s a good idea to have background knowledge in finance and a close working relationship with a professional who can properly guide you.

What You Need to Know

Before setting up a SMSF, you should always speak to a professional in the field. As a trustee, there are still restrictions and regulations that you need to abide by to protect your financial security and safety.

Self managed funds are developed with the purpose to protect you in your future retirement. Therefore, certain measures need to be taken towards your financial protection, including an exit strategy and professional audits.

Investor Style and Decisions

The running of a SMSF obviously poses a more complex process than the traditional APRA regulated fund. A SMSF requires you to identify what kind of investor you are, seek the best advice possible, and continuously improve your strategy.

As an investor, your experience will play a huge part in all of your decisions, so new investors should always seek professional assistance. SMSFs are typically suggested for those who thrive on challenges and actively seek out ways to improve as an investor. Keeping up with challenging market decisions and changes in Government policies or regulations can be difficult when planning to invest so having a financial advisor on your side can be a helpful way to monitor your SMSF.

To begin your SMSF journey, get in touch with Gavin Ma & Co today.