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    Self-Managed Super Fund Pros and Cons

    With the tax advantages of superannuation funds and the control of a private investment, the Self-Managed Super Fund seems to provide the best of both worlds. Like every investment vehicle though, there are pros and cons to consider before deciding that this is the answer for retirement provision for you and your family.


     Investment choices should always be informed, and that doesn’t only apply to the fund, it also applies to the choice of fund to use. To make an informed choice about the Self-Managed Super Fund option for retirement provision, here are some pros and cons of the fund to consider.

    Pros of Self-Managed Super Funds

    1. Control – The obvious benefit of a Self-Managed Super Fund is that the fund members become trustees, either directly or via directorship of a corporate trustee, and make the decisions on investment strategy. For experienced investors, this can be liberating, not relying on fund managers to control their assets for them.
    2. Taxation – Because trustees of a Self-Managed Super Fund control the investments made, both in terms of the assets invested in and the timing of entry or exit from investments, the fund can be tailored to maximize tax benefits available.
    3. May Lower costs – Although there are set up fees and ongoing costs for accounts and registrations because a Self-Managed Super Fund removes the cost of a fund manager, it reduces the annual cost of the fund compared to a retail super fund.

    Cons of Self-Managed Super Funds 

    1. Investment Experience – Without a fund manager, the costs may be reduced, but unless the trustee or trustees understand investments, the returns may be reduced too. For the fund to be effective, investment decisions must be consistently good. In that context, those thinking of Self-Managed Super Funds must be sure they have the investment skill, or be able to bring in such skill, for the life of the fund.
    2. Time – Taking on a Self-Managed Super Fund for a trustee is a big commitment. These are long term investment vehicles, those investment decisions, the need to maintain compliance with all aspects of the fund, including yearly accounts, registrations and so on, are always there. For any trustee, that means time, as well as stress and responsibility. Anyone thinking about a Self-Managed Super Fund must be prepared to maintain that commitment throughout.
    3. Funding – By their nature, Self-Managed Super Funds require a significant startup balance to be worthwhile. Industry wisdom suggests $200,000, although many are launched with less, the reality is that a Self-Managed Super Fund needs between $120,000 - $150,000 minimum start-up balance to achieve its goals.

    The key with the Self-Managed Super Fund is understanding the limitations. This is especially true of the commitment required, and how the assets the fund holds can be used. However, for those who want active control of their funds and have the necessary time and investment experience, the Self-Managed Super Fund is a fantastic option, which is why so many are starting them each year.


    For the full breakdown of Self-Managed Super Funds check out our article: The Self-Managed Super Fund and why you should have one


    We welcome you to give our team a call to discuss your investment goals and objectives.

    You can call Walker Capital Australia on +61 2 8076 2210, and we’ll see how we can help you achieve your investment goals.