Self-Managed Superannuation Funds (SMSFs)

Why consider an SMSF?

SMSFs are proving to be a popular mechanism to save for retirement. They offer the flexibility to choose and manage what investments are held within the fund and control over investment strategy.  There are many reasons to consider your own SMSF.  Some of the pro’s and cons are shown below.

Some Pro’s and Cons of SMSFs.

SMSFs require careful supervision and management. All SMSFs must lodge a tax return and undergo an audit each year; which imposes a compliance cost.  Some SMSFs must also obtain an actuarial report (something that can be explained in consultation).  You need to weigh up how the costs of establishing and maintaining an SMSF compare with management costs associated with commercially available Superannuation funds.

Management of risk. All investments involve some degree of risk, so by taking control of your investments, you also take onboard the responsibility for managing the risks associated with them.  This is both a strength and a weakness; because you have more direct control over what risks you take; but you must also be careful to match your investment strategy to what risks you are willing to accept.

SMSFs have investment choices unlikely to be available elsewhere.  The most popular example is ownership of rental investment property within an SMSF.  By contrast, bigger managed funds have access to all kinds of investment markets that it would be hard to access through an SMSF.

Large super funds have considerable resources at their disposal, which means they can usually conduct financial transactions more cheaply than an SMSF can; conduct more extensive research and retain financial experts to inform their investment choices.  However, all this generally comes at a cost which can affect the effective rate of return you actually achieve on your investments.

Philosophy on SMSFs and Superannuation

I provide independent financial advice on SMSFs.

If you choose to approach me for Superannuation advice, I believe it is important that we share a similar approach and philosophy.

In Australia, almost every employee has money put aside by their employer into their chosen superannuation fund.  Typically 9.75% of gross earnings in the 2016 financial year.  That is a big chunk of money, year in, year out.  Many people I have spoken with are unaware of their current Super balance or how it performed over the last few years. Few are confident that they know whether their current funds or the trajectory of their savings will provide adequately for retirement.

My philosophy with Super is foremost one of education.  Helping you understand the risks and rewards of financial strategies is good step to allowing you to make informed choices about how your money is being and should be managed. SMSFs are just one such choice; but I believe whatever choices you make should be considered choices you are happy with.

My approach to recommending SMSFs (or not) is one of understanding all prospective members of the fund including financial goals, experience, time and commitment, preferences; income, assets and liabilities to establish whether an SMSF might be a good fit for you.

I’ve chosen to provide SMSF services from a belief that you have the right to directly manage how your retirement money is invested; after all – it is your money. I think that’s a lot more believable when you are in charge of it.

How can I help?

I provide a range of services tailored to those wishing to explore setting up an SMSF and those wanting establish and/or manage an SMSF.

I am licensed to:

  • Recommend whether you should establish an SMSF and review your existing Super arrangements in that context.
  • Provide advice on contributions to an SMSF.
  • Advise on certain “Classes of Product” you may hold within your SMSF:
  1. Basic deposit products (e.g. term deposits).
  2. General insurance products.
  3. Life risk insurance products (e.g. life insurance, trauma, TPD, income protection).
  4. Simple managed investment schemes.
  5. Securities (e.g. share portfolio diversification).

I can also recommend you seek advice on other financial products we cannot advise upon ourselves; such as margin lending, derivatives and share options.

“Class of product” advice (in the context of SMSFs) means I can recommend you take out a class of product  – like life insurance; advise of characteristics of life insurance products in a general way; examine factors that affect how much cover should be taken out; but not recommend a specific product to you.

Please ask for a copy of my Financial Services Guide (FSG) for more details.

As a registered tax agent, I can also prepare tax returns for SMSFs and provide taxation advice relating to superannuation including SMSFs.

Fees for SMSF services

Fees for all SMSF services are calculated at $330 per hour inc GST billed in 6 minute intervals.  Some consultations services have a minimum time allocation to ensure matters can be covered in sufficient details to meet your best interests. Ask for a copy of my FSG for details.

Fees for Statements of Advice where Personalised Advice is Required

As advice regarding the set-up and class of products within an SMSF may (and probably will) involve a degree of personalised advice, you should be aware that we may be legally obliged to prepare and issue you with a Statement of Advice, the preparation of which is also time billed at the given rate. See my FSG for details.

Joe Sharpe AFSL: 484867