Self Managed Superannuation Funds (SMSF)

At Compass Financial we provide a specialised Investment Management Service that is focused specifically on assisting investors who operate their own Self Managed Superannuation Fund. To find out more information refer to the Portfolio Admin tab or Contact Us.

Why should I consider a Self Managed Fund?

A Self Managed Superannuation Fund (SMSF) is where you are the trustee and member of the fund. The growth in popularity of these types of superannuation funds can largely be attributed to the following features of a SMSF.

1. Control and flexibility

Almost every aspect of a self managed superannuation fund offers the opportunity for as much control and flexibility as you want or need. As trustee of your own fund, you have maximum flexibility in relation to fund investments, tax strategies and estate planning.

You can utilise the services of specialists that do administration and accounting specifically for self managed funds. You can also utilise investment specialists such as Compass Financial to tailor your investment strategy to suit your specific needs.

2. Cost effective

There is the potential for cost savings compared to other types of superannuation funds, dependent upon the level of funds you hold in superannuation. Due to the set-up costs and annual fixed costs of a SMSF, it is generally not considered economically viable to establish your own fund unless you have around $500,000 available to invest, unless you are planning to make significant contributions to your fund.

The fund’s cost effectiveness will usually improve as the value of the fund’s assets increase.

3. Greater investment choice

Self managed funds offer almost limitless investment choice, so long as you are within the superannuation laws.

With your own SMSF you are able to invest in direct equities and property, international shares, fixed interest, term deposits and cash; and alternative asset classes. You are also able to choose the proportions in which you invest in these asset classes and the individual investments to be made within each sector.

4. Taxation efficiency

It is the taxation efficiency of self managed funds that attract many investors, this includes:

  • The ability to use imputation credits from shares paying fully franked dividends to substantially reduce the tax liability of the fund. Importantly, excess imputation credits can be refunded to the fund – a key point for funds with pension members

  • Control over when assets are bought and sold to minimise any capital gains tax

  • The ability to structure tax-effective estate planning strategies

5. A long term retirement structure

A self managed superannuation fund has the added advantage that it can carry you straight through from accumulation phase to pension phase, all in the same fund. This means that you will have an effective long-term superannuation structure. Many other funds require you to transfer out of your accumulation fund into a pension fund.

6. Estate planning opportunities

For specifically tailored estate planning strategies, there are no superannuation funds that can match the flexibility that is possible within a self managed fund. Whether it is the ability to pay a tax-free lump sum to a spouse, or a tax effective allocated pension to children, self managed funds can provide that flexibility and many other funds cannot.

It is important to remember that a self managed fund is not for everyone as there is more involvement required of you as a trustee than if you were to place your superannuation in a public offer or industry fund. However, if you want to control where and how your funds are invested, then it may be the best option for you.

For more information or to determine whether this type of fund might be appropriate to your specific needs, please Contact us.

This information is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each person are different and you should seek advice from a financial planner who can consider if a SMSF is right for you.