Top 5 Successful SMSF Tips

Article by Alex Cattell

Self-Managed Super Fund administration can be challenging, but when you follow advice for running a successful Self-Managed Super Fund (SMFS) you significantly lower the chances of making poor decisions.

What Is a Self Managed Super Fund?

A Self-Managed Super Fund is a DIY superannuation option where you’re able to manage your own superannuation benefits. SMSF is a private super fund that is regulated by the Australian Taxation Office, it can have up to four members, and all members must be trustees (or directors, if there is a corporate trustee).

As a member and trustee of the fund, you are responsible for decisions made about the fund and ensuring compliance with relevant tax and superannuation laws. Set up costs and annual running expenses can be high, so it is most cost-effective for those with large super balances.

Why Use a Self Managed Super Fund

Consolidating super accounts allows for increased fund assets and investment opportunities, with only a single set of fees. Making the switch from an industry or retail super fund gives the benefit of investment control with the added investment opportunity in residential and commercial property, collectibles, term deposit and direct shares.

Follow our top five SMSF tips you need to successfully manage an SMSF.

Top 5 SMSF Tips

1. Know-How SMSF’s Work!

The biggest advantage of having an SMSF is the level of control you have over the fund and its investments. Beware though, as with greater control comes greater responsibility! As a trustee (or trustee director) of the fund, you are ultimately responsible for what goes on in the fund so you must ensure you understand your legal responsibilities surrounding the investments you make.

2. Engage an Advisor

You need to set and follow an investment strategy that is appropriate for your risk tolerance and is likely to meet your retirement needs. Engaging a licenced financial advisor can assist you to do this by looking at your personal circumstances and helping you work out the best investment plan for you.

3. Keep on Top of Running the Fund

Make sure you retain records of all the appropriate documentation for the fund to assist in accounting and audit compliance. Due to the strict regulations around SMSFs, it’s best to keep all documentation relating to the fund and provide a copy to your fund administrators and auditors. Providing all the information to your fund administrator also ensures they have what they need to keep fund transactions up to date. This allows you to obtain current member balance information to assist you in your decision making.

4. Constantly Review

Part of running an SMSF is ensuring you are regularly reviewing the investments in the fund and checking that they are in line with your investment strategy. If your circumstances change, i.e. you are getting closer to retirement and need more cash in the fund to start making pension payments, then your investment strategy should be reviewed and updated.

5. Embrace Technology

Most SMSF professionals that assist you in managing your SMSF administration use cloud software. These software options often have client user screens where you can see how your fund is doing in real-time. Bank and investment data feed directly into the software and can provide you with a current member balance. The software we use at SRJ Walker Wayland even has an App available for you to see your fund information. If your administrator is using these technologies, make sure you get access.

Contact SRJ Walker Wayland

As experts in the field, SRJ Walker Wayland provides professional business accounting and advisory advice for all things financial. If you have any questions regarding our SMSF tips or need an SMSF administrator, get in touch with us today!