future assist - smsf 101

7/27/2019 Future Assist - SMSF 101

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1. What is an SMSF?

S U P E R A N N U A T I O N S P E C I A L I S T S

Future Assist Financial Services Group Pty Ltd (ABN 24 151 337 843, AFSL No. 413674)

An SMSF is a type of Superannuation fund where you, as a trustee andmembers, have responsibility over the management, investment andadministration of your fund.

SMSFs are quite different from other super funds because they give you totalcontrol over how your Super balance is invested. SMSFs open up a world ofinvestment options that may not be accessable in a retail or industry fund.

An SMSF may be appropriate for someone who wants to take their retirementgoals seriously and prefers to make their own investment choices, rather thanleave their Superannuation to be invested by fund managers.

SMSFs are run by you, for you and any other members of your SMSF and areestablished for the sole purpose of building retirement savings.SMSF structures can be quite complex depending on the asset classes youinvest in. There's a lot to consider, but partnering with qualified professionalslike Future Assist save you time and the administrative burden to free you upto focus on making the decisions.


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2. Benefits of SMSF:


1. Control:

SMSF assets are controlled by you (the trustee/s), who can choose exactlywhat the fund invests in. This includes direct residential or commercial prop-erty, direct equities, Cash, Gold and many other asset classes, with thepossibility of gearing into these investments.

2. Flexibility:

Trustees have the flexibility to make decisions regarding investments quickly(for example when the market is moving), and select options for securingyour retirement income streams.

3. Families:

SMSFs may provide advantages in a family situation where up to four mem-bers are trustees and contributing towards your family SMSF.

4. Taxation:

A self-managed super fund enjoys one of the lowest rates of tax of anyentity structure in Australia. This can prove very advantageous when invest-ing for the purposes of retirement.

5. Direct Asset Investment:

A large motivating factor of setting up an SMSF for a lot of Australians has

been the possibility of direct equity and property investment.Residential and commercial property investment is one direct asset classwhich is not available inside retail and industry funds. Nor is the ability to useyour superannuation as leverage to borrow funds and invest in residential orcommercial property. Many Australians prefer to invest in property becausethey are comfortable with it. Chances are they own or are paying off theirown home and know and understand the market better than equities,precious metals, bonds or any other investment class.



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3. What do I need to consider before

starting an SMSF:There's a lot to consider before you decide to set up an SMSF. This includes, amongother things, your super balance, your current and future super contributions, thenumber of members joining the fund and their ages, how much time you have to spendon your SMSF, your retirement goals, investment preferences and your risk profile.

The Australian Tax Offices first recommendation on their website for someone wantingto consider an SMSF is it is strongly recommended you seek professional advice andassistance to set up your SMSF. Such as an adviser or accountant, both of which you

can get access to as a client of Future Assist.

All circumstances are different, however generally you need to have a reasonableamount of super, or be looking to build up your super quite quickly, to justify the costsof an SMSF. Everyone has a different view of 'how much' money is enough to start aSMSF, and there is no legal minimum. As a guide the ATO's suggests a minimum of$200,000 (that is, if the total balance of all members in the fund equates to $200,000 ormore). This is based off an ATO average running cost of $4,400 per annum.Future Assist have clients with balances lower than $200,000, and due to our running

costs being significantly lower, can justify a lower entry balance.

As an SMSF trustee, it is important that you are aware of and understand the duties,responsibilities and obligations of being a trustee. You will need to ensure that yourfund operates in accordance with all applicable laws. You will also need to be aware ofand follow the rules set out in your fund's trust deed.

You need to be comfortable making investment decisions around when, where andhow to invest or consider working with an adviser to help you. In particular, you should

seek advice around borrowing if this is of interest to you. Depending on yourcircumstances, gearing in your super may or may not be appropriate.Future Assist is a Full Services accounting-based financial planning firm who helpshoulder the burden of administration and compliance, releasing you to make informedinvestment decisions.

The average SMSF trustee in Australia spends 2 3 hours per weekadministrating their SMSF. The average Future Assist client spends about 3 hours per

year on administrational obligation.

You should consider discussing your situation with a Future Assist adviser beforedeciding if an SMSF is right for you.


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4. What will an SMSF cost?


The costs of setting up and running an SMSF vary depending on, amongother things, your circumstances, super balance, investment strategy andhow you choose to manage your fund. The more complex you make it, themore it is likely to cost.

However, with this said, the difference between an SMSF and a retail orindustry fund is the fact that SMSFs operate on a fixed annual fee, asopposed to an ongoing percentage of your fund balance.

In certain cases, SMSFs have lower associated fees compared to

other super funds.

Future Assist Accountants administer SMSFs on a fixed annual fee, asopposed to most funds that operate on a percentage of your total balance.With Future Assist, the more your super grows, the more economical anSMSF will become and the more expensive it then becomes to leave it othersuper funds who charge on a percentage basis.

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Life is as much about the journey

as it is the desination

Y O U R G O A L S | O U R F O C U S


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5. Common Investments in SMSFs:

funds (ETFs).

constructed and managed by a professional investment manager based

on your needs.

international shares, property, alternative assets, fixed interest and cash.

property.

example artworks).

Superannuation law doesn't specify the various types of investments forsuper funds, however the Superannuation Industry (Supervision) Act 1993requires trustees to comply with a number of duties and obligations when

making investment decisions.

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The general process of setting up an SMSF involves:

There are a few other things that you need to consider and put inplace to become fully compliant.

Future Assist is uniquely set up to help you with this process.

Future Assist utilise integrated accounting and financial

planning departments to be able to offer compliance peace of

mind as well as investment advice.

For more information on how the set up process works,

contact us today: 1300 118 618



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6. How do I set up an SMSF?


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future assist - smsf 101

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