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Help With Self-Managed Super Funds and Advice on Self-Managed Super Funds

Many Australians have thought about setting up a Self-Managed Super Fund (SMSF) at one time or another. The notion of being the person calling the shots can seem attractive to many, especially those who are somewhat financially savvy.

Before you finalise your plans to set up an SMSF, you would do well to consider the many responsibilities that are part and parcel of a self-managed super.

Nine Facts You Should Know Before Choosing to Set Up an SMSF

1. An SMSF is a significant financial decision. You are legally responsible for your investments, following the super regulations, and following the tax code. Unless you are knowledgeable about investing and have experience with this type of process, you may bring yourself a great deal of trouble from the government.

Types of activities that are illegal:

  • Receive payment for your services as a trustee
  • Gain access to funds early
  • Make investments in related businesses
  • Use of your fund’s assets-like spending a holiday in your investment property

2. You, along with up to five others, are the SMSF trustees. All trustees have equal responsibilities for running the fund and making decisions that impact the retirement money of all trustees. This means you are legally responsible for other trustees’ decisions even if you had no hand in them.

You may choose to appoint an SMSF professional to help you run your super. Be aware that even if you have selected an SMSF professional, the final responsibility and accountability lie with you as the trustee.

3. You are obligated to inform the ATO and ASIC of any changes to your fund within 28 days. These changes include,

  • Trustees
  • Members
  • Directors of the corporate trustee
  • Address
  • Your contact details
  • A change in fund status

The most straightforward way to advise ATO and ASIC of any changes is to submit them through your registered tax agent.

4. Manage the fund with skill, honesty, and diligence – You must develop the fund’s trust deed and ensure your SMSF complies with the deed as well as the rules of the Superannuation Industry (Supervision) Act 1993 (SISA). The act states that as a trustee, you must:

  • Act honestly in all matters concerning your fund
  • Make decisions that are in the best financial interest of all members
  • Allow trustees to perform their functions or powers
  • Not attempt to access or allow others to access benefits early
  • Maintain control over your fund
  • Ensure your fund meets the sole purpose test and exists only to provide retirement benefits for members

Remember that other trustees have the right to take legal action against you if you fail to comply with these statutes.

5. You must develop your fund’s investment strategy according to restrictions under the super laws. You must also regularly review it.

6. Follow the guidelines of your trust deed and super laws when accepting contributions and rollovers.

7. Ensure accurate and up-to-date record keeping that is:

  • Written in English
  • Verifiable
  • Not encrypted
  • Providing an accurate record of your fund’s history
  • Maintained for up to ten years

8. Perform yearly tasks that include:

  • Pay your SMSF’s income tax liability and supervisory levy yearly
  • Submit the SMSF annual return (SAR) every year
  • Prepare your SMSF’s financial statements every year
  • Value the fund’s assets each year
  • Arrange audits every year by an independent approved SMSF auditor who is registered with ASIC

9. Financial advisors can provide significant assistance to you. Even though you are self-managing your super fund, advice from an expert is a wise decision. Consider consulting with a professional who is qualified and experienced, such as the team at Freedom Wealth Services. This will give you peace of mind that comes with ongoing professional support.

Frequently Asked Questions About Self-Managed Super Funds

How Do SMSF and APRA (Australian Prudential Regulation Authority) Super Fund Returns Compare?

APRA funds use experienced professionals with proven skills to manage funds, so you need a high confidence level to opt for self-management. Often, individuals believe they will do a significantly better job managing their super than APRA. However, that notion has been refuted several times. The majority of SMSFs do not perform better than APRA funds.

Can I Choose My Investments Without Setting Up an SMSF?

In many cases, you can have some control over your investments. You can check your fund’s investment options on its website or ask about seeing a product disclosure statement (PDS).

How Can I Access My Super Early?

The general rule is you can access your funds only when you retire. However, you may be able to get your money sooner.

For this, you need to meet certain conditions, such as a documented financial hardship or a specific medical condition. Be wary of anyone offering to “help” you get your money early for things like paying off credit card debt. These are illegal scams and could cost you your money and identity.

What are the Three Stages of an SMSF?

  1. Starting Up – Decide if an SMSF is suitable for you and then set up the fund
  2. Running – Administer the SMSF, manage investments and pay benefits
  3. Wrapping Up – Finalise reporting and obligations and then close the fund

Must I Have Other Members In My SMSF?

As of 2021, you are permitted to have up to six members registered in your self-managed superannuation fund. However, approximately one-quarter of these funds had a single member. Two-member SMSFs are the most popular type.

What Are the Rules for Setting Up a Self-managed Super Fund?

To set up a self-managed super fund, you need to have four or fewer members. You can include yourself and other people as members and all of you will be trustees. Trustees are responsible for the running of the fund and should act in the best interests of all fund members when making decisions.

If you are considering a self-managed super fund but need to know more so you can make an informed decision, feel free to reach out to our expert team at Freedom Wealth Services. We can help you determine the pros and cons of an SMSF and how self-management could impact your super.

*General Advice Warning – “Any financial product advice is provided by Freedom Wealth Services Pty Ltd AFSL 502934 The advice provided is general and is not personal financial product advice. The advice provided has been prepared without taking into account your objectives, financial situation or needs and because of this you should, before acting on it, consider the appropriateness of it regarding your objectives, financial situation and needs. You should carefully read and consider any Product Disclosure Statement (PDS) that is relevant to any financial product that has been discussed before making any decision about whether to acquire the financial product.”

You can contact Freedom Wealth Services Pty Ltd on 1300 843 400 or by visiting our website at