Why is it I want a Self Managed Super Fund?

When we question people deeply about why they want a SMSF the sort of responses we get include the following:

• Control – To make conscious choices on what we do with our money
• To be forced to learn – I’d like to know more about investing.
• To make my money work harder – I’d have a wider range of investment options.
• To have transparency – To be honest I couldn’t tell you what my money is invested in at the moment and it makes me feel guilty.
• To have ownership of the outcome – I probably couldn’t do any worse than my current fund.
• Economies of Scale – My siblings or children and I can combine resources to do bigger and better things.
• Follow the leader – I know someone who just set one up and think I’m in a similar position so maybe I should have one.

What do I need to Know?

• Don’t just do it – We see many cases of people with SMSF’s who would have been better off sticking with their employer or industry fund.
• To get control and transparency you don’t need a SMSF – But you may need a different fund to the one you have
• It will mean more fees, paperwork and probably a greater need for professional advice from Accountants, Lawyers and Investment Advisors.
• You won’t have anyone to blame. Many have blown up their life savings by using a SMSF and retirement nest egg as a hobby.
• Who can set one up for me – Banks, Financial Planners, lawyers and Accountants. They just need to be licensed to recommend that you have one and how to structure it.
• Is there a level of assets that I need to make it worthwhile? Yes but it depends on how much you value the benefits outlined above so we don’t quote a fixed level because everyone is different.

Give me some examples of who they may or may not suit!

• The Property lover – You need a SMSF to buy your own property directly with your super money (with or without a loan).
• The really aggressive investor – A young stock broker may be willing to pay for the setup and ongoing compliance fees in order to have their $30,000 in super invested in pre IPO seed opportunities and for that they need a SMSF.
• The person with $400,000 in super and retiring – if they are looking for a normal diversified portfolio of assets that they can draw down on in retirement then a SMSF is possibly an unnecessary burden and expense.
• The dual income couple with $200,000 in super and $50,000 pa being contributed for the remainder of their working life – Getting the right super fund now rather than waiting could avoid the 10% CGT that their fund would pay if they eventually rolled into a SMSF. And bedding down the right advisors and strategy now when they are playing with less money rather than later when it is larger can limit wealth destruction.
• The business owner who needs a commercial property – Effectively fixing the rent they pay for their business premises for the life of owning the business by buying rather than renting may look like a wonderful decision in 20 years.
• The undisciplined or devious – The ATO can take 45% of the super assets from non complying super funds and the freedom of a SMSF makes non compliance an easy trap.
• The expat – The trustee (you) needs to be a resident of Australia for the fund to be complying so this has often caught people out.

What are my options for setup and ongoing management?

• Your accountant will welcome the opportunity to set up the fund and do the tax return and coordinate the annual audit. But many aren’t licensed to provide super and investment advice.
• Financial Advisors will welcome the opportunity to provide you with detailed advice around setting up and structuring the SMSF and recommendations for and management of the investments. But most aren’t able to do the tax return or the Audit work. In this instance your accountant may be able to do it or they will have an outsource service for the accounting requirements.
• You can use a stock broker for the investment advice but they are generally not equipped to provide the structuring advice or complete the accounting.
• And some brave souls do it all themselves using online services.

What can we expect if we discuss a SMSF with Bennett Wealth Group?

• After clarifying your situation we can advise if you need one or if there is a better, less complex option that still gives you control, transparency and makes your money work harder.
• Our clients with a SMSF have confidence they are taking full advantage of the SMSF opportunities available.
• We make the complex implementation simple and are happy to work with your accountant if they wish to play a role in the setup and ongoing tax and audit phases.
• We make the complex ongoing compliance simple by liaising with accountants and auditors to ensure compliance is done. This is important for busy people who don’t want the SMSF to take them away from life.
• We can ensure that if you have life and TPD insurance the costs are tax deductible, adequate and cost effective by placing this inside your SMSF.
• Ensure the estate planning and transfer or control issues of the super fund and your investments are managed because it isn’t controlled by your will.
• If you have a stock broker we can advise on the setup and structure of the fund and liaise with them so they can invest your super money.
• We are financial strategy specialists so we ensure your SMSF contribution and investment strategy is congruent with your other non super investment strategies so the overall wealth and tax management plan is always optimised.
• We love SMSF’s but they aren’t for everyone. We can provide you with advice on what the right super solution is for YOU and we will charge a fee for that advice. So if you engage us you have confidence that you will get a recommendation that is truly in your best interest.

Contact us today on 08 92742888 to discuss the benefits of a SMSF solution for you.

Bennett Wealth Group is not your typical financial planner or SMSF specialist in Perth – read more about the BWG Way here.