Pros and Cons of a SMSF |Camori Investments

Pros and Cons of a SMSF

Pros and Cons of a SMSF

Managed Superannuation from Camori Investments is ideal for most Australian’s with superannuation, however, a Self-Managed Super Fund (SMSF) isn’t. What are the Pros and Cons of a SMSF?

More than 1.1 million Australians have walked away from their retail or industry super fund in favour of managing their own super via a SMSF. At last count, SMSFs within Australia held $622 billion in investments, over 577,000 funds.

The profile of an Australian SMSF today is younger than previously with the median age reducing from 59 years to 48 years. It’s a positive sign as the earlier you start focusing on your superannuation and retirement the better.

While Managed Superannuation is ideal for everyone, a Self-Managed Super Fund isn’t. To make the best decision for you and your retirement future, it’s vital that you speak to a licensed financial adviser such as Camori Investments. We can go through the pros and cons and more importantly how they relate to your particular situation.

Pros of Self-Managed Super Fund

Control
If you like to be 100% in control then a SMSF is for you. You have control over how much you are going to contribute and where the funds are invested.

Tax Advantages
With smart strategies in place (we can help with this), you can reap tax advantages that aren’t available via other superannuation options.

Family Fund
A SMSF is a fund you can have up to four family members in. This allows you to group together funds and invest together, instead of having separate funds. Depending on your situation, this can provide tax and estate planning benefits.

Less Fees
If you have a large balance you can potentially reduce your fees by using a SMSF over a retail or industry fund, as SMSF administration fees are generally fixed regardless of balance size.

Flexibility
A SMSF allows you the flexibility to select different investment options and the flexibility to choose how your retirement funds are invested.

Returns
Many Australians believe that they can outperform the retail and industry super funds by managing their own superannuation.

Cons of Self-Managed Super Fund

Barrier to Entry
According to the Australian Securities and Investment Commission (ASIC), it’s recommended that you have a balance of at least $200,000 prior to establishing an SMSF. At this point they found the most benefit for SMSF over retail or industry funds.

Skills
As you are in control of your fund and investments, you must have the necessary skills to ensure that your superannuation is invested correctly. Before setting up a SMSF, make sure you have the skills you need.

Time
Along with the skills you need to allow additional time to manage your SMSF.  As the economy and market changes, you need to ensure that your investments are going in the right direction.

Risk
SMSF can come with additional risk if you are unsure how you should be investing the funds. It’s of vital importance that you work with a licensed and SMSF qualified financial adviser if you want to set up and manage a SMSF.

Responsibility
While a SMSF offers more flexibility and control you must comply with the Australian rules and regulations. It’s 100% your responsibility to ensure you do this, even if you are working with a licensed SMSF adviser.

As you can see there are many Pros and Cons of a SMSF. The best solution for you will depend. If you are looking for better performance from your super without the headaches of an SMSF, then Managed Superannuation from Camori Investments might be an option for you. Contact a Camori super specialist today.

Camori Investments offers both Managed Superannuation and Self-Managed Superannuation and can help you determine the best choice for you.

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