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3 Reasons Why a SMSF Is Right for You

23 Aug 2013 8:35 PM - Joshua Stega, Financial Adviser Sydney

Self managed funds or SMSF's continue to grow in popularity as people seek to take control of their retirement assets. Are you ready to take the leap?

1. You want to take control

Superannuation is a tax effective structure for accumulating and later paying retirement benefits. The main reason people choose to setup a self managed superannuation fund is because they want to take control of their retirement assets.

The biggest weakness of industry funds is that they are a solution for the masses; in other words there is no tailoring of the investment strategy to meet your particular requirements. When you have a small super balance and/or are busy with other responsibilities, a general solution such as an industry fund is probably worthwhile. As you build a larger asset base and/or want to take responsibility for your retirement, a self managed superannuation fund makes a lot of sense.

In a SMSF you can choose your investments, you can select the most appropriate insurances and you can implement strategies, such as transition to retirement, that are often overlooked when people are not taking an active interest in their nest egg. Once you do retire and start living off your superannuation investments it is absolutely imperative that you know where, and how, your income is being generated and one of the best ways to achieve this is using a SMSF.

TIP: A good way to structure your portfolio is using the bucket approach to investment selection. This takes into account the potential timeframe for accessing your funds and provides suitable investment options to match.


2.       You have a team of experts in place to assist you

Running a self managed fund requires the services of a range of professionals. If you consider that public offer superannuation funds have large teams of experts in place to enable them to manage assets appropriately, you need to recreate this network when you take control of your superannuation fund.  

You will need an accountant and a good financial adviser who can help you direct the process of managing your retirement assets. A financial adviser will also be able to provide specialist assistance to ensure your insurances are in place and elements such as your estate plan are current.

TIP: When selecting a financial adviser to help you direct the self managed fund process, make sure you use a professional with the SPAA expert adviser accreditation from the SMSF Professionals Association of Australia, this is the highest level of accreditation available.


 3.       You have developed an investment strategy for your superannuation

Many people assume that taking control of their superannuation is easy. While it is relatively easy to setup a self managed fund, you need to put a lot more thought into the day to day management of the funds.

A SMSF will not manage itself; you need to have an investment strategy in place to document exactly how your fund is going to meet your retirement objectives.

How will you arrive at your retirement objective if you don’t have a plan in place?

As part of the investment strategy you also need to consider elements such as insurances and estate planning to ensure that your nest egg has the appropriate protections in place.

TIP: Seek the assistance of an expert to help develop the investment strategy for your SMSF. Once again look for a SPAA SMSF Specialist Advisor, as you can be assured they have the skills required to provide you with the best advice.

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  • How much super do I need?
  • How do I consolidate my super?
  • Which superannuation fund is best?
  • What about self managed super? 
  • Why do I have insurance in super? 
  • Is a SMSF right for me?

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The Wealth Guy | Joshua Stega Financial Adviser Sydney

Joshua Stega, is head of financial advice at JAS Wealth (privately owned financial planning firm in Sydney). He helps successful individuals manage their wealth. He has a Masters in Taxation & Financial Planning, is a Fellow of the Taxation Institute, a SMSF Specialist Advisor and has significant direct investment experience.    Google+     Twitter     LinkedIn     Facebook     Instagram

M.TaxFP, LLB(Hons), B.Bus(Acc), FTI, Adv.DipFP, DipFP, SMSF Specialist