Is It Easy To Set Up A Self Managed Super Fund?

Those who wish to have more say over their retirement funds and investments may find a Self-Managed Super Fund (SMSF) to be an appealing alternative. You have more say over your retirement plan with an SMSF than with a conventional superannuation fund, which is overseen by a bank or other financial organization. However, keep in mind that setting up and running an SMSF isn’t a picnic.

A substantial investment of time, knowledge, and skill, as well as adherence to all applicable regulations, is necessary.

If you’re trying to decide whether an SMSF is the best option for you, this article will walk you through the necessary procedures for setting one up. We’ll also go over the duties you’ll have as a trustee and any possible advantages or disadvantages.

You must be well-versed in the intricacies and legal responsibilities associated with SMSFs if you intend to establish one, whether to gain investing flexibility or to cut costs. This guide is designed to give you the basics of setting up an SMSF so you can make a well-informed decision.

Is It Easy To Set Up A Self-Managed Super Fund?

Setting up a Self-Managed Super Fund (SMSF) can offer greater flexibility and control over your retirement savings, but it is not generally considered an easy task. It involves a range of complex steps and ongoing responsibilities. Here’s a breakdown of what you need to consider:

  • Legal Structure: An SMSF requires a formal legal structure. You need to establish a trust, which involves creating a trust deed, appointing trustees, and ensuring compliance with the regulatory requirements. This can be complex and often requires professional advice.
  • Regulatory Compliance: SMSFs are regulated by the Australian Taxation Office (ATO) in Australia, and similar regulatory bodies in other jurisdictions. As a trustee, you’re responsible for ensuring compliance with superannuation laws, tax laws, and reporting requirements. This involves preparing and lodging annual returns, undergoing audits, and adhering to strict rules about fund operations and investments.
  • Trustee Responsibilities: Trustees have significant legal and fiduciary responsibilities. This means making investment decisions in the best interest of fund members, managing the fund’s assets, and maintaining proper records. Non-compliance can result in penalties or loss of the fund’s concessional tax status.
  • Investment Knowledge: An SMSF allows you to invest in a wide range of assets, including shares, property, and other financial instruments. However, this flexibility requires a solid understanding of investments and associated risks. You’ll need to develop an investment strategy that complies with superannuation laws and meets your retirement goals.
  • Costs and Fees: Setting up an SMSF involves initial setup costs, including legal fees and other administrative expenses. There are also ongoing costs for auditing, compliance, and potentially financial advice. The total costs can be significant, especially for smaller fund balances.
  • Time and Commitment: An SMSF requires ongoing management and administration. This involves record-keeping, compliance, and making investment decisions. If you’re not comfortable with this level of involvement, an SMSF may not be suitable.
  • Professional Advice: Given the complexities, most people seek professional advice when setting up and managing an SMSF. This includes legal, accounting, and financial advice, adding to the overall costs.

While setting up an SMSF can provide control and flexibility, it requires a significant level of commitment, expertise, and compliance. It is not generally considered easy, and it’s important to weigh the benefits against the costs and responsibilities.

Before deciding to establish an SMSF, carefully consider whether you’re prepared to take on the legal, financial, and administrative responsibilities involved. If you’re unsure, seeking professional advice is a good first step.

Is It Worth Having A Self-Managed Super Fund?

Deciding whether to set up a self-managed super fund (SMSF) is a complex choice that depends on a variety of factors, including your financial goals, investment knowledge, willingness to take on compliance responsibilities, and the costs involved. Here are some key considerations to help you determine whether an SMSF is worth having for you:

Pros Of Having An SMSF

  • Control and Flexibility: SMSFs allow you to choose and manage your investments directly, providing greater control over your retirement savings. You can invest in a wider range of assets, such as property, direct shares, and collectibles.
  • Tailored Investment Strategy: You can create a bespoke investment strategy that aligns with your retirement goals, risk tolerance, and preferences.
  • Consolidation of Family Super: SMSFs can have up to six members, allowing family members to pool their superannuation into one fund. This can provide benefits in terms of investment scale and administration.
  • Estate Planning: SMSFs offer flexibility in estate planning, allowing you to control how your superannuation is distributed upon your death.
  • Potential Cost Savings at Scale: For larger balances, the cost of running an SMSF can be relatively lower compared to other superannuation funds, leading to potential cost savings.

Cons Of Having An SMSF

  • Regulatory Complexity: SMSFs are subject to strict regulations, requiring annual audits, compliance with superannuation laws, and extensive record-keeping.
  • High Initial and Ongoing Costs: The costs of setting up and maintaining an SMSF can be significant, especially for smaller fund balances. Costs include legal fees, accounting, audits, and other professional services.
  • Time and Effort: Managing an SMSF requires a significant time commitment and a good understanding of investments and compliance requirements.
  • Risk of Non-Compliance: Non-compliance with regulations can result in penalties, fines, or even the loss of concessional tax status. This risk is higher if you are not familiar with superannuation laws.
  • Expertise: Successful management of an SMSF requires a certain level of financial knowledge and investment experience. If you’re not comfortable with investing and compliance responsibilities, an SMSF may not be suitable.

Is It Worth It?

Whether an SMSF is worth having depends on your circumstances, financial goals, and willingness to take on the associated responsibilities. If you value control and flexibility and have a significant superannuation balance (often suggested at least $200,000 to $300,000 to justify the costs), an SMSF might be worth considering.

However, if you prefer a more hands-off approach, are concerned about compliance risks, or have a smaller superannuation balance, a traditional superannuation fund or a different investment vehicle might be more appropriate.

Before setting up an SMSF, it’s crucial to conduct a thorough analysis of your financial situation and seek professional advice from a qualified financial advisor or accountant who specializes in SMSFs. They can help you understand the risks, costs, and responsibilities involved and guide you in making an informed decision.


Before making the big choice to set up a self-managed super fund (SMSF), think about your financial objectives, level of investment knowledge, readiness to handle regulatory compliance, and expenses.

You may be able to achieve your retirement goals with more control, flexibility, and the ability to personalize your investment strategy with an SMSF. Nevertheless, a significant time investment, as well as legal obligations and continuing expenses, are required.

An SMSF may be a good fit for you if you want a more hands-on approach to managing your retirement funds and are well-versed in investment strategies and applicable regulations. However, a conventional superannuation fund may be more suitable if you worry about the complexity and hazards associated with maintaining an SMSF or if you would rather take a hands-off approach to your retirement funds.

Take stock of your present financial standing, your plans for retirement, and your level of comfort with trustee duties to establish whether an SMSF is a good fit for you. Make sure you make an educated choice by consulting experts like financial advisors and accountants who specialise in SMSFs.

In the end, your retirement and financial plans should be in sync with your decision to set up an SMSF. Achieving your retirement goals is possible with the help of expert advice and careful consideration of the benefits and drawbacks of each option.

Click “how much money do you need to set up a self-managed super fund” to know more. 

Leave a Reply

Your email address will not be published. Required fields are marked *