Australian Drilling Attachments

Is a self-managed super fund right for you?

Robert Coyte
Shartru Wealth
 
Self-managed super funds (SMSFs) have become increasingly popular in recent years as they provide a wide range of benefits to investors. They do not suit all circumstances however.
The following covers some of the advantages and disadvantages that you should consider before progressing further.
 
Advantages of SMSFs
• Personal control - An SMSF provides flexibility that allows a fund to be established to cater for specific needs (within the constraints imposed by the relevant governing legislation).
• Cost control - An SMSF may deliver investors with cost savings when compared to other types of superannuation structure.
• Investment flexibility - All SMSF trustees are required to formulate and implement an investment strategy. All investments of the fund must be made in accordance with that strategy. Some restrictions on investments that can be made by a fund may apply.
• Retirement income streams - Depending on the terms of the SMSF’s trust deed, an SMSF may offer one or a number of income streams to members.
• Life Insurance - In circumstances where a member of an SMSF is identified as having needs that may best be covered by life insurance, consideration should be given to holding that life insurance cover within a superannuation fund. The premiums are paid from the members contributions to the fund and are tax deductible to the Fund paying the premium.
• Estate Planning - Within an SMSF the member has a number of choices in terms of directing what will happen to their benefit in the event of their death. The options available may be more flexible than alternative types of structures.
• Taxation Planning - An SMSF may have an advantage over alternative superannuation structures including: the payment of contributions tax is able to be deferred until it is actually due, allowing investment earnings to accrue on those funds until they become payable; and where insurance benefits are provided by an SMSF and a claim arises, opportunities may exist for favourable taxation treatment of the payment of such benefits.
 
Disadvantages of SMSFs
There are some potential disadvantages with running an SMSF:
• Trustees must assume responsibility for operation of the fund. Although certain functions may be outsourced , this does not release trustees from their responsibilities,
• SMSFs may be costly to administer, particularly where only relatively small amounts are being invested in the structure.
 
For further information contact Shartru Wealth on 1300 478 424, email rob@shartru.com.au or visit www.shartruwealth.com.au
Robert Coyte Robert Coyte
is a highly experienced financial advisor having owned and operated financial planning practices for the past 16 years. Overall Robert has 21 years’ experience in comercial banking, financial markets, stockbroking and financial planning.

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