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Top 2 Facts For Self Managed Superannuation Funds (SMSF)

Goals for Self Managed Super Funds.

  • Invest in the most tax efficient manner possible;
  • Keep some level of control.
  • Gain asset protection.

SMSF Observation.

Many clients have little understanding of Superannuation, are scared of legislative change and feel they have little or no control over their second biggest asset other than their home.

Fact 1: APRA announced in January 2013 that $1.4 Trillion was held in superannuation and of this $439 billion was held in Self Managed Superannuation Funds (SMSF).

Fact 2: Building wealth when you are taxed at 15%, 10% or even 0%, makes increasing wealth so much easier than achieving a return where your tax rate is 32.5% or higher. SMSF tax rates vary between 15% and 0% depending on how they are structured.

How to gain control of your investments.

Post the GFC, many investors felt they had been let down by Fund managers particularly those with strategies they did not fully understand. Many managers were not prepared for what occurred and stuck to their mandated investment formula, selling out of investments only to buy back into the stock market on the same day. Some clients opted out to and crystallised their loss, while many clients stayed the course unsure what to do. The latter group have recouped their funds over the five years through very moderate returns. According to APRA the 200 Large Superannuation Funds averaged 3.9% per annum for the five year period ended the 30th June 2013.

Results over the period highlighted to many clients the lack of control they had over their investment and retirement plans. Conversely, many of our long term clients believed they had more control investing in assets they understood, while still being diversified.

Cash, Fixed Interest, Direct Property and Shares are all able to be invested in through their SMSF.

Asset protection.

We find small and medium business owners, often expose all the Assets they own to the claims of financiers and others who could send them to the wall. Superannuation affords a level of asset protection like no other. For those on a salary it is even more secure.

Super Fund Compliance.

Many clients are often concerned by the regulatory compliance of the fund, fees to maintain a fund, estate planning issues, insurances and the need for investment advice.

Before we establish any SMSF, using Strategic Financial Advice Pty Ltd, the business Financial Planning arm we will take you through a complete process to ascertain the suitability of an SMSF for you.

TJD Accounting Services

319 Keilor Road

Essendon

VIC 3040

9379 4040

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