A self managed super fund (SMSF) is a private super fund that you manage yourself. SMSFs are different to industry and retail super funds.
These are the 4×4 vehicle of superannuation funds. They offer almost unlimited options, the flexibility to go wherever you want when it comes to investing, and they’ll get you where you want to go when it comes to superannuation and retirement.
Due to the number of options available they really are a specialist vehicle, as a result they require more professional help in driving and maintaining them.
If they are used without getting the proper help and advice, such as the SMSF survival centre provides, although money may be saved the driver/member can use them incorrectly. When trustees of an SMSF contravene either the ATO or SIS regulations they can end up with fines and penalties that far outweigh any savings.
They mainly suit superannuation fund members with large superannuation balances that want to have greater control over their own financial and superannuation destiny. They have grown in popularity to the point where the funds held by SMSFs make them the largest type of super fund.
Just as there is a wide choice in different types of four wheel drives, there is also a wide choice in who a person gets to set up their self managed super fund and also who they use to help them with their administration duties.
In some cases administration costs can appear very low but this can often come at the cost of reduced investment options, which after all is what having an self managed super fund is all about. In other cases the services offered by an administrator can appear to be wide, but this will often result in higher administration costs.
Warning: ASIC recently said it was worried about the number of SMSFs investing in residential real estate. In many cases developers of the residential real estate, and or their commission driven sales people, are getting people with very little super to set up an SMSF so they could sell their properties. If someone suggests setting up an SMSF just to buy a property get independent professional advice before doing anything.