Taking control of your financial future

Control over investments

A SMSF gives you the highest level of control over your superannuation. Trustees of the fund can essentially invest in any investment that they believe will deliver the best retirement result (subject to various constraints imposed by superannuation laws). In light of the recent global financial crisis where retail fund members were at the mercy of the fund manager’s decisions, this control over has become increasingly important. Knowing how, where and why your investments have been made makes for long term peace of mind.

Flexibility

SMSFs are the most flexible superannuation retirement savings vehicle available. As the trustee of the fund, you have the ultimate flexibility in executing the various strategies allowed by superannuation law. These can include such strategies as establishing pensions (including standard account-based pensions and transition to retirement pensions), segregation of member accounts or transferring business real property held personally into your SMSF.

This last strategy is of particular relevance for medical professionals as there are significant taxation benefits with holding “business real property” (such as the practice or surgery building) in a SMSF.

By and large these strategies are unavailable to retail funds which are geared more towards a ‘one-size-fits-all’ product.

SMSFs can also take advantage of any changes in superannuation law as soon as they come into effect, rather than waiting for a fund manager to provide a standardised product.

Cost effective

There is no minimum amount required to establish a SMSF. However, we would generally suggest that a SMSF is only suitable if the fund (i.e. you and up to three other individuals) would have at least $200,000 to invest or you have a specific strategic goal, such as borrowing within the SMSF.

For larger superannuation balances, a SMSF is generally much more cost effective than a retail fund. The reason being that administration fees are fixed up-front and do not increase proportionally with the balance of the fund. The report by Jeremy Cooper, A Statistical Summary of SelfManaged Superannuation Funds, found that SMSFs generally paid lower fees and on average performed better than all other superannuation funds during the three years to 30 June 2008.

As you can see, there are significant benefits to managing your own superannuation via a SMSF.

If you think it’s time to take control of your financial future, talk to our iMEDSuper team today!