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SMSF - Big Sky Financial Solutions

Self Managed Super Funds



Self Managed Super Funds

Do-it-Yourself (DIY) super via a self managed super fund (SMSF) is becoming an increasingly popular choice for investors who want to have control of how their superannuation monies are invested.

Operating your own superannuation fund can provide investment flexibility, strategic control, estate planning advantages and potential cost savings. These benefits make SMSFs an attractive option. However, legislative requirements and the demands of managing investments mean that it’s not as straightforward as it may appear.

Big Sky Financial Solutions services are designed to provide advice and assistance to the extent you may require or prefer. Managing your own superannuation requires a minimum level of funds to be cost effective, and that you are willing and equipped to manage investments and ensure compliance.

Big Sky Financial Solutions can help you make the most of your superannuation with a comprehensive range of cost-effective services. These include:

  • Establishing your fund
  • Strategy development / investment advice recommendation
  • Day to day administration
  • Compliance and legislative requirements
  • Regular reporting and audits
  • Establishing your pensions
  • Arranging updates to your fund’s trust deed to deal with changes to superannuation

What is a self managed super fund (SMSF)?

An SMSF is a trust where money or assets are held and managed on behalf of members to provide future retirement benefits. The Superannuation Industry (Supervision) Act 1993 and Regulations (SIS) and related legislation govern Australian superannuation funds and the Australian Tax Office (ATO) is responsible for overseeing the regulation of SMSF's.

Mentioned below are some features of the SMSF structure. This information is only an overview, please discuss your personal circumstances with a Big Sky Financial Solutions financial planner. Big Sky Financial Solutions has a comprehensive service and advice package that can assist and guide you in setting up and operating an efficient SMSF.

SMSF requirements

  • 4 members or less
  • All members are trustees (or directors of trustee company)
  • All trustees/directors are members
  • Special rules for single member funds
  • No member is an employee of another unless related
  • Trustees receive no remuneration
  • Regulated by ATO

Why a SMSF?

  • Greater flexibility
  • Personal control over investments
  • Wider range of investment options, eg. invest in direct shares and property
  • On going after retirement
  • Estate planning opportunities

Disadvantages of a SMSF

  • Lack of investment expertise among trustees
  • Onerous trustee responsibilities:
  • Trustee obligations
  • Administrative obligations
  • Risk of non-compliance due to lack of knowledge of SIS Act
  • Potentially greater running costs for smaller funds

Investment Standards

A self managed fund must:

  • satisfy the ‘sole purpose test’
  • have an investment strategy
  • enter transactions on an arm’s length basis

A self managed fund must not:

  • borrow
  • acquire assets from related parties
  • lend money to members
  • provide financial assistance to members or relatives of members
  • invest > 5% of the funds assets in in-house investments.