Are Self-Managed Super Funds Really Worth the Hype?

The popularity of self-managed super funds (SMSFs) has continued to soar through the roof. The rising acceptance is no doubt unconnected to uncertainty surrounding the stock market, with many investors suffering significant losses in recent years. These funds are among the fastest-growing investment vehicles today. But you may wonder: are these self-managed superannuation funds really deserving of the massive hype?

self managed super fund

One of the appeals of self-managed super funds is the fact that they are open to virtually everyone, provided they have access to the right abilities and skills. Also known as a Do-It-Yourself Fund, an SMSF usually has a maximum threshold of four members. One thing that stands self-managed superannuation fund apart from other types of funds is the fact that its members double as its trustees. You may click here to find out more on these special funds.

Benefits of Self-Managed Super Funds

There are several benefits that can be reaped from having do-it-yourself funds. Below are few of them.

Total Control

If you desire freedom and to be in complete control of your money, self-managed super fund is a good choice for you. It gives you total freedom to control how investments are made. You can also influence the rules guarding the operation of your fund to an extent. For example, you will be able to make useful input into rules on tax strategies, accumulation decisions, retirement planning and asset allocation, amongst others.

Diversification of Investments

Since being a member of an SMSF also makes you a trustee, the associated right to control allows you to choose any type of investment that you feel would work for your financial goals. You do not have to rely on a total stranger to make such vital decisions for you. The freedom is there for you to invest in a variety of assets, including shares, property, bank deposits and even managed funds. Diversification enables you reduce your exposure to risk on individual asset.

Tax Concessions

Another benefit attached to self-managed super funds has to do withtheabil2defer tax payments to a later date. Unlike for some other types of funds, trustees are allowed to postpone the lodgment of their tax returns. This makes more funds available to trustees for making further investments.

Cost Effectiveness

An SMSF offers an avenue to cut down on costs and make savings in the long run. This is because of the fact that the costs of managing such a fund do not rise over time. Cost effectiveness rises as fund account balance becomes higher.


The fact that the number of members of an SMSF is limited does not mean the death of a member can spell the demise of the fund as well. The benefits that accrue to a member can be paid to his spouse and/or children if he happens to die.

Relevant Things to Note

For a self-managed super fund arrangement to work, it is essential for the trustees to possess or have access to the right skills or expertise. Administration of the fund can become a nightmare without these abilities. But you should be just fine if you have access to professionals such as those at Aside helping to set up a fund, these people can as well assist in administrative duties such as preparation of financial accounts, auditing and filing of tax returns.

It is also pertinent to point out that the ability of the fund to diversify by investing in a wide range of assets can be inhibited by limited resources. You may find it impossible investing in all assets you would love to without adequate resources. It is therefore essential that you know how to make the most out of the resources you have at your disposal.

There are rules and regulations that you have to ensure at all time that your self-managed superannuation fund does not run afoul of. This is why it helps to seek the assistance of a professional if you are unsure of your ability to stay in line with legal requirements.