Self-managed super funds offer more control over your retirement savings — but they come with real costs and responsibilities. Here's what to weigh up.
A self-managed super fund (SMSF) is a superannuation fund that you run yourself, rather than having your super managed by a large industry or retail fund. SMSFs can offer more control and flexibility over how your retirement savings are invested — but that control comes with legal responsibilities, ongoing costs, and compliance obligations that aren't right for everyone. If you're wondering whether to compare SMSF advisors or set one up, it's worth understanding the basics first.
An SMSF is a trust structure with its own trustee (either individual trustees or a corporate trustee) and up to six members, all of whom are usually also trustees. As a trustee, you're legally responsible for running the fund in compliance with superannuation and tax law — even if you use professionals to help with admin, accounting and advice.
SMSFs involve ongoing costs and obligations that don't apply to members of large super funds, including:
SMSFs tend to suit people who want direct control over specific investments — for example, holding direct property, a particular share portfolio, or business real property used in their own business — and who have a balance large enough that the fixed costs of running an SMSF represent a reasonable proportion of the fund's assets. They also suit people who are willing to put in the time (or pay for support) to meet the ongoing compliance requirements.
If your main goal is simply low fees and a diversified portfolio without the hassle, a well-chosen industry or retail fund may achieve that more simply and, for smaller balances, more cost-effectively. An SMSF is also generally not a good fit if you're planning to move overseas in the near future, given the residency requirements discussed in our Guide to Superannuation for Australian Expats.
SMSF management while abroad is one of the trickiest areas — the fund generally needs to continue meeting Australian residency tests to remain compliant, even while a trustee is temporarily overseas. If you have an SMSF and are considering a move overseas (or you're an expat thinking about setting one up), this needs to be planned carefully.
There's no legal minimum balance, but because of the fixed costs involved, an SMSF generally needs a reasonably substantial balance before it becomes cost-competitive with other super options. We can model this based on your situation.
Yes, subject to the fund's investment strategy and the relevant rules — including restrictions on related-party transactions and, for residential property, who can live in it.
Most SMSFs use a specialist accountant for the annual return and audit, and many trustees also get financial advice on the fund's investment strategy and how it fits with their broader retirement plan.
Superannuation & SMSF Advice · Investment Advice · Back to Resources
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