Setting up a SMSF

About 30% of the $1.6 trillion in superannuation is held by self-managed super funds, by far the fastest growing segment of the superannuation industry.

Fast growing because of the number of people disillusioned with the industry's fees and returns and believing they can do a better job than the professionals.

But if you are thinking of setting up your own fund:

 Firstly, don't rush into it and

 Secondly, avoid it entirely if you are going to start with less than $500,000*.

 *We are well aware that much lower threshold values are given, but this is ours.

What do I first need to consider?

While you may want to have hands-on control of your own fund you should first consider the following questions:

 Do I have skills in any one or more of the following: business, accounting, law, investing, tax, superannuation. If not, leave your money with the professionals. If so, be objective about the level of skills you have and realise in advance that you will be tested. Setting up and running your own fund is a complex business.

 Am I confident my fund will perform better than other options and satisfied my retirement savings will be better off taking into account the benefits and costs, including my time? That's a big call, so be careful.

 Can I perform the legal and other duties as the trustee of my fund, set and implement an investment strategy for my fund, keep its records, arrange for an annual audit and keep up to date with my role and responsibilities?

 Am I prepared to commit the time to set it up then to monitoring and managing my investments on a regular basis?

 Am I willing to pay an array of professionals such as auditors, accountants, tax agents, lawyers, financial advisers and sometimes even actuaries.

 Am I prepared to arrange and purchase separate life insurance, income protection or disability cover?

If yes to the above, what do I do next?

Visit the website of the Self-Managed Super Fund Professionals' Association of Australia, read the publications that we give exposure to below and if you are then still determined to have your own fund, we recommend you get advice.

Further reading:

Thinking about self-managed super - by the ATO  

Setting up a self-managed super fund - by the ATO

Warning: Self-managed super attracts crime - by AAP

Running a self-managed super fund - by the ATO

Payimg benefits from a self-managed super fund - by the ATO