Is a self managed super fund right for you?
2025 | 6min read
What you need to know to run a SMSF
With a self managed super fund (SMSF), it’s a much more hands-on experience compared to a traditional super fund. That can mean spending more of your time now and in retirement to manage it, or paying a financial adviser to do this for you. For some, being in complete control is an exciting prospect. Others may wish to save their time and leave the responsibility to their super fund.
Your SMSF, your investments
With a SMSF, you’re responsible for researching what you invest in and monitoring your portfolio’s performance.
Compliance and regulations
You’re also responsible to make sure you follow the law and are compliant with regulations, annual audits, admin & record-keeping, and any related fiduciary duties.
Know the show
Considering the responsibilities of running a SMSF, it's beneficial to have a strong understanding of finances including share markets, investing and economic cycles.
What to consider
Depending on how your finances are set up and what you’re invested in, there are positives and negatives to running your own self managed super fund.
Benefits
You’re in control
When you’re the trustee of your self managed super fund, you’re in complete control of your investment strategy. Not only do you decide what to invest in, you can also choose when to sell as well, and at what time depending on market conditions and fluctuations.
Fees
With a flat fee, SMSFs can be a good option if you have a large portfolio of assets.
Tax rates
With a self managed super fund, you get the same tax rate as a super fund – 15% on investment returns. Your SMSF has to be compliant in order to receive this tax rate.
Investments
An SMSF could be right for you if you have a property investment portfolio. You can also invest in more obscure assets like artwork, rare coins & stamps, and gold & silver bullion.
Estate planning
There are options and flexibility when it comes to estate planning with a self managed super fund.
Drawbacks
Time, knowledge, responsibilities
To run a SMSF, you need all of the above – time knowledge and responsibility. It takes time to research what to invest in. You need to know what’s good, what’s bad, what’s happening, when to buy, when to sell. And there are admin duties to attend to, to ensure your SMSF remains compliant.
Fees
If you have a smaller financial base, fixed fees for a SMSF may take a bigger chunk out of your retirement savings.
Residency requirements
There are residency requirements that are required for a SMSF to remain compliant. Professional advice is recommended to ensure these conditions are met. For more information, visit the Australian Tax Office website: Fund residency conditions.
Insurance premiums
You’re likely to pay higher insurance premiums as you don’t have the bargaining power of a large super fund.
Frequently asked questions
No – you don’t have to be self-employed to have a self-managed super fund.
Yes – the super guarantee falls under mandated employer contributions, and they can be paid directly into your SMSF by an employer – provided it is a complying fund.
To make a SMSF worthwhile, you need to consider your starting balance and the fees that will be incurred to manage it.* There is no line in the sand where a SMSF is better than a traditional super fund. It all comes down to the set-up costs and ongoing fees, and how that compares to the returns that are made. It also depends on what you’re capable of doing – and what you’re willing to do. With a SMSF you’re in charge of investing your money and managing the day-to-day administration, as well as ensuring your SMSF remains compliant.
* Super laws and non-compliance, Australian Taxation Office.
If your self-managed super fund doesn’t perform as you had hoped, the responsibility falls with you and your investment decisions.** If it’s not performing, one course of action could be to transfer to a traditional fund, where financial experts are in charge of investing your finances to get the best return for your retirement savings.
** Understanding SMSF Performance Report. Research report compiled for the SMSF Association by the International Centre for Financial Services, The University of Adelaide February 2022
If a self-managed super fund fails to meet rules and regulations, as the trustee, you may be disqualified and the complying status of the fund can be removed, which can result in significant tax penalties.^
^ Rectification direction, Australian Tax Office.