The rise and rise of SMSF's


Self managed super funds (SMSFs) are growing at a rapid pace in Australia, with latest statistics from the Australian Taxation Office (ATO) revealing that there are more than 509,000 SMSFs with nearly 964,000 members. These numbers have continued to trend in an upwards direction, increasing from June 2012 when there were nearly 476,000 SMSFs and around 899,500 members.

The average size of a SMSF is more than $990,000 with the average member balance being approximately $524,000.

In the year to 30 June 2013, nearly 3000 SMSFs were established every month in Australia, with a total of 35,776 SMSFs established for the total year.

In 2013, SMSFs saw the lowest amount of wind-ups in the last five years, with less than half a per cent of funds closing down, supporting the view that as more people shift away from retail and industry funds, members are rarely going back on their decision after establishing their own SMSF.

The most popular investment in SMSFs remains listed shares with on average more than 31 per cent of all assets held in direct shares, with cash and term deposits following closely, making up about 30 per cent of all assets. Non residential property and Unlisted Trusts follow with 11.5 per cent and 8.7 per cent respectively being held in these investments.

Whilst SMSFs are popular, they are not for everyone and you should get specialist advice about your own personal circumstances before deciding if one is right for you. Anyone who advises on SMSFs must hold an Australian Financial Services Licence and be qualified in advising superannuation trustees and fund members.

As the regulator, the ATO wants to ensure funds are managed properly in order to accumulate retirement benefits for members so follow these tips to help you on your way.

Know your role and your responsibility. As a trustee of a SMSF, you are solely responsible for the day-to-day operations of your super fund. Getting it wrong whether by accident or carelessness can have serious ramifications. It can mean loss of concessional tax status for your fund, fines or civil or criminal penalties for the trustee.

Don’t do it on your own. Whilst a self managed super fund implies that you are managing it yourself, you can partner with a financial planner to ensure all rules are being followed and yearly obligations are met, allowing members to concentrate on business or pursue other personal interests like travel whilst still retaining control.

Don’t set up a SMSF purely because it is going to save you in costs. Your retail or industry fund investments were professionally managed and you were paying fees for them to do this on your behalf, so expect to pay fees for an adviser to assist you with managing your own super fund investments.

As is often the case, you get what you pay for, and poor advice or trying to keep up with all the changes in legislation yourself can mean trouble with the regulator and an under-performing super fund. Do it right and do it well as at the end of your day, your retirement lifestyle can be affected by these decisions.

Review your strategy. A strategy can be ineffective unless it is monitored and reviewed regularly. Review your super fund strategy at least once a year to ensure it is right for all members, their objectives and personal circumstances.  The upside of regular reviews of your fund strategy can potentially lead to extra benefits, tax savings and more money in retirement.

While there are many benefits of having your own self managed super fund, you should always seek advice first to ensure it is right for you. Be mindful that not all financial planners are licensed to advise on SMSFs, so ask the question of your financial planner to ensure you are getting both points of view when it comes to deciding on whether you should stick to your existing super fund or establish your own. Your financial planner can run you through what your role and responsibilities will be, how to best structure a SMSF and the advantages and costs of having one.

Olivia Maragna is the co-founder of Aspire Retire Financial Services and has been  named the Australian Adviser of the Year. Olivia’s advice is general in nature and readers should seek their own professional advice before making any financial decisions.

Send your finance questions to Olivia at

You can follow Olivia at

Read more articles from Olivia’s column in Brisbane Times at the following link

Olivia Maragna

Olivia Maragna