Thinking about self-managed super

If you set up a self-managed super fund (SMSF), you’re in charge – you make the investment decisions for the fund and you’re held responsible for complying with the super and tax laws. It’s a major financial decision and you need to have the time and skills to do it. There may be better options for your super savings.

It’s best to see a qualified, licensed professional to help you decide. The website of the Australian Securities and Investments Commission (ASIC) has information about choosing a financial adviserExternal Link.

An SMSF must be run for the sole purpose of providing retirement benefits for the members or their dependants. Don’t set up an SMSF to try to get early access to your super, or to buy a holiday home or artworks to decorate your house. These things are illegal.

Compare SMSFs with other super funds

Members and trustees

SMSFOther super funds
Can have a maximum of four members.All members are either individual trustees or directors of a corporate trustee of the fund. This means all members are involved in managing the SMSF.Usually no limit on the number of members.Professional, licensed trustees are responsible for managing the fund.


SMSFOther super funds
Trustees are expected to have a knowledge of tax and super laws and must make sure their fund complies with those laws. Compliance risk is borne by the SMSF trustees, who can be personally fined if their fund breaches the law.Compliance risk is borne by the professional licensed trustee.


SMSFOther super funds
Trustees develop and implement the fund’s investment strategy, and make all investment decisions.Most allow you some control over the mix and risk level of your super investments but you generally can’t choose the specific assets your super will be invested in.


SMSFOther super funds
Trustees must consider whether to purchase insurance for their members. Insurance premiums may be higher than in other super funds.Most offer insurance cover to members. Member insurance usually costs less as large funds can get discounted premiums.


SMSFOther super fundsRegulated by the ATO. Trustees are required to engage with us to manage their fund.Regulated by the Australian Prudential Regulation Authority (APRA). Generally members don’t have to engage with APRA.



SMSFOther super funds
We are not involved in resolving disputes among members. Disagreements can be resolved through alternative dispute resolution techniques or in court, at the members’ own expense. There is no government compensation scheme.Members have access to the Superannuation Complaints Tribunal and may be eligible for statutory compensation.

Fraudulent conduct or theft

SMSFOther super funds
No government financial assistance is available to SMSFs.Members may have legal options under Corporations Law but there is no guarantee that compensation will be awarded.Members may be eligible for government financial assistance in the event of fraud or theft.

Consider the costs, time and skills

You need to have the time and skills to manage your SMSF, and there are ongoing running costs.

As a trustee of an SMSF you’ll be responsible for operating your fund within the law. If you don’t, you may face severe penalties and your fund may suffer tax consequences.

You’ll also need to make investment decisions for the SMSF, including formulating an investment strategy that you review regularly. You’ll need to understand the restrictions on the investments an SMSF can make.

It costs money to set up and run an SMSF. You might find that the fees you pay for an SMSF are more than you would pay in another type of super fund. Every year that you have an SMSF you’ll need to pay for an independent audit and the supervisory levy. Most SMSFs also pay for additional help, such as:

  • preparing the SMSF annual return
  • valuations of the SMSF’s assets
  • actuarial certificates for SMSFs paying income streams (pensions)
  • financial advice
  • legal fees, for example if the trust deed needs to be amended
  • assistance with fund administration
  • insurance for members.

*reprint from the Australian Taxation Office

Create and Protect Financial Planning
Create and Protect Financial Planning group helps you set realistic lifestyle and financial goals and provide you with advice on strategies to achieve those goals. This can include managing debt, budgeting, investments, superannuation, retirement planning, risk management and estate planning.

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