A self-managed super fund (or SMSF) is an attractive investment that many people use to handle their retirement investments. It is a way that Trustees can manage these investments to get the biggest return when retirement looms. So, before you get started, make sure you are aware of some common SMSF mistakes.

  • Do Nothing – It is incredible how many people have setup a self-managed super fund and the money just sits in cash. This comes from an invariable lack of knowledge and understanding of what a self-managed super fund is, how it works, what you can invest in etc. Trustees need to take an active role if they want to be successful and grow their retirement investments.
  • Planning Setup Costs – the cost of setting up an SMSF can grow quite quickly and Trustees should plan for this should their investment become successful within the fund. It is always good to write down the known costs to better plan such as accounting, auditing, trustee company structure expenses, ongoing advice.
  • Not Understanding Legal Responsibilities – SMSF’s come with strict rules which are bound by the SIS Act as well as the trust deed. It is imperative that Trustees fully understand their responsibilities and continue to keep updated with any legal changes.
  • Not Having an Investment Strategy – You would not construct a building without a blueprint therefore you would not setup an SMSF without a plan. One of the biggest mistakes people make when setting up their fund is not having a written investment strategy. The law states that your investment strategy should be writing and that is shows that what the fund has invested in is in sync with your strategy.
  • Appointing the Right Adviser – Choosing the right SMSF professional is essential in ensuring your self-managed super fund is not only setup correctly but that it is managed smoothly by a practicing professional (i.e. accountant or financial planner).

Can you relate to some of the items above? If you have any questions or wish to seek clarity on any SMSF issues, please ask one of our Advisors here at PJT by calling our SMSF Experts on 07 5413 9300.