Who Can Set Up a SMSF?
People often want to know who makes the perfect profile for a SMSF before taking the plunge and opening their own. SMSFs are essentially DIY retirement funds that provide trustees with more control and transparency over their investment decisions. Knowing you fit the profile for a SMSF is important to identify early on to ensure you don’t waste your time or money.
The Perfect Profile
There are situations where a SMSF may not the recommended solution because it just isn’t practical in terms of your lifestyle or level of experience. Many professionals will recommend SMSFs to people who can comfortably afford the set up costs and annual running fees, while also having the time to properly monitor a self managed fund. For example, somebody who works full-time, is busy operating a business or has no previous financial knowledge may struggle to successfully manage the fund.
However, there is no minimum balance requirement when it comes to setting up a SMSF, which means that essentially anybody can do it. This does serve as a risk though, as the costs of running a SMSF can only truly be justified if you have a substantial amount of super to invest in it. Running a successful SMSF also requires contact with a trusted adviser, which will ultimately add to costs.
Setting Up a SMSF
In order to set up a SMSF, trustees must ensure they’re complying with the necessary regulations and rules placed by the Australian Government. To receive tax concessions, your fund must be established in Australia and be monitored by an Australian provider.
In general, the typical set-up of a SMSF involves:
- Seeking professional assistance
- Properly identifying that you’re eligible to be a SMSF trustee
- Choosing the fund type and appointing trustees or directors
- Applying for an ABN and TFN
- Identifying your investor style and strategy
Gavin Ma & Co can provide trusted advice and assistance in regards to setting up SMSFs. Contact us today to find out how we can assist.