Key Things to Know and Consider Before Setting up an SMSF

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Rather than pool their retirement funds with thousands of others and trust superannuation companies to invest their money, some people prefer to take their future wealth creation into their own hands, and set up a self-managed super fund (SMSF). This can bring some great benefits, but also comes with a lot of responsibility, and requires considerable skill to ensure it works to the advantage of members.

Here are few important things to know about SMSFs, and what to consider before you decide to set up your own fund.


6 basic things to know about SMSFs
  1. An SMSF is essentially a legal tax structure that is regulated by the ATO.
  2. SMSFs can have up to four members, who all act as trustees or directors.
  3. The funds in an SMSF must be used only for the purposes of future retirement.
  4. In an SMSF, members have the option of deciding where to invest their funds, which may include shares, property, or even collectibles such as artwork, antiques or jewellery.
  5. The members are entirely liable for all the decisions made in an SMSF –even if they outsource some of the functions or obtain professional advice.
  6. SMSFs are subject to annual audits by a qualified SMSF auditor to check for compliance.


Some of the benefits of an SMSF include access to a wide range of investments, being in control of your own retirement funds, and the ability to borrow from a lender to invest in property – although this last one comes with some pretty stringent rules.


4 considerations for setting up a super plan
  1. Funds: For an SMSF to be viable, it needs to have a considerable sum for investment, although it can be started with a small amount and added to as members roll over their funds into it. SMSFs need to cover numerous costs, and it’s important to have some liquid assets in place to meet these.
  2. Time and skills: Administering an SMSF requires considerable time, such as for researching investment options and making decisions on behalf of members. Skills in managing finances are also required, as well as a full understanding of super tax laws and how superannuation funds work.
  3. Retirement goals: Before setting up, it’s important to have goals in place for retirement as these will help to guide and direct your actions.
  4. Investment rules: Trustees need to understand comply with investment rules, such as recognising that the fund’s assets must not provide any members or their related parties with a current benefit. This means for example that if your fund invests in property or artworks, neither you as a member or your related parties can use these assets for private purposes.
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There’s certainly a lot to think about when it comes to establishing your own super fund. The good news is you don’t have to go it all alone – there is always the option of employing a professional accounting firm in Sydney that has in-house licensed financial advisers, to assist you in managing your investments.


  • To find out more about SMSFs, or for advice on investment and asset protection, get in contact with our SMSF experts at Chan & Naylor Wealth Planning for Australia-wide service.
  • Need a qualified SMSF Auditor to do your annual SMSF audit? Please contact our C&N Audit Services centre in Brisbane for further assistance.


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