Setting Up Self Managed Super Fund

For years and years, the big banks and their financial advisers have been stealing from our savings through their hidden fees, commissions, and kickbacks. One great way to avoid this is setting up a self managed super fund (SMSF), which is a retirement plan that gives you the opportunity to actively manage your own super and make your own investment choices. An SMSF offers a number of benefits for investors such as investment flexibility, full control and no restrictions, making it a great retirement option for many.

retirement plan

However, setting up an SMSF requires various steps to be completed as to start operating your fund. First, you should choose an experienced self managed super fund specialist to assist you in setting up Self Managed Super Fund properly and effectively. Your specialist will provide you with a clear application form and once you complete it, you’ll be able to choose the best SMSF structure for your needs.

When setting up Self Managed Super Fund process, there are two types of structures to choose from:

  • Individual Trustee – yourself and up to three other trustees that pull their personal funds into a superannuation fund.
  • Corporate Trustee – here the members of directors of a proprietary limited company are the trustees of the super fund.

As a trustee or a director, you are responsible for running the fund and making decisions that affect your retirement interest and that of each member. Therefore, you must act in the best interest of all fund members when making decisions, ensuring that the fund is managed separately from your own affairs and that the money in the fund is only accessed when the law allows you to do so.

The next step will be to arrange for your trust deed to create the fund rule. This is the book of rules of all governance operation and they will include rules around acting as a trustee, membership, contributions, benefits and anything else that has to do with the fund.

You will also need to complete various registrations within the Australian Taxation Office not only to become regulated (which must be done within 60 days) but to also apply for a tax file number, an Australian business number, along with some other additional registrations.

Setting up a bank account for your SMSF will also be necessary to manage the fund’s operations including accepting contributions, making investments and receiving investment income and paying all fund expenses and liabilities. The bank account must be kept separate of any individual or business bank accounts that you already have.

Once the fund is legally established, it’s important that an investment strategy is prepared that sets out the investment objectives and how you plan to achieve them. Always keep in mind, that regardless of the fact whether someone has a more active role within the fund, each trustee or director is equally responsible for the fund.