Post by Wayne Shultz on Sept 18, 2023 2:29:48 GMT -5
A self-managed super fund (SMSF) is a private super fund that you manage yourself. SMSFs are different to industry and retail super funds. When you manage your own super, you put the money you would normally put in a retail or industry super fund into your own SMSF. You choose the investments and the insurance. Your SMSF can have no more than six members. As a member, you are a trustee of the fund — or you can get a corporate trustee. In either case, you are responsible for the fund. While having control over your own super can be appealing, it's a lot of work and comes with risks. Only set up your own super fund if you're 100% committed and understand what's involved.
The risks and responsibilities of SMSFs
All members of an SMSF are responsible for the fund's decisions and for complying with the law. These responsibilities come with risks:
- If you lose money through theft or fraud, you won't have access to any special compensation schemes or to the Australian Financial Complaints Authority (AFCA).
- You are personally liable for all the fund's decisions — even if you get help from a professional (such as a financial adviser, accountant or legal professional), or if another member made the decision.
- Your investments may not bring the returns you expect.
- You are responsible for managing the fund even if your circumstances change — for example, if you lose your job.
- There may be a negative impact on your SMSF if there is a relationship breakdown between members, or if a member dies or becomes ill.
- You could lose insurance if you're moving from an industry or retail super fund to an SMSF.
The risks and responsibilities of SMSFs
All members of an SMSF are responsible for the fund's decisions and for complying with the law. These responsibilities come with risks:
- If you lose money through theft or fraud, you won't have access to any special compensation schemes or to the Australian Financial Complaints Authority (AFCA).
- You are personally liable for all the fund's decisions — even if you get help from a professional (such as a financial adviser, accountant or legal professional), or if another member made the decision.
- Your investments may not bring the returns you expect.
- You are responsible for managing the fund even if your circumstances change — for example, if you lose your job.
- There may be a negative impact on your SMSF if there is a relationship breakdown between members, or if a member dies or becomes ill.
- You could lose insurance if you're moving from an industry or retail super fund to an SMSF.