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What Is An SMSF? How Can It Help You?

The abbreviation SMSF stands for self-managed super fund which, like all other funds, is a simple fund that provides financial compensation to its members after they have retired and are no longer working and earning wages in the normal way.

But there the similarities end. In an SMSF the members of the fund are also its trustees. Typical SMSFs can have anywhere from one to four members. The most advantageous aspect of SMSFs over other super funds is the “customization” that the members can achieve to tailor the fund as per their needs. This is vastly different from the retail funds where decisions are made in order to benefit the collective instead of the individual, whereas in an SMSF it is the individual need that is considered during decision making. Typical SMSFs are established with independent TFN’s and ABN’s with a separate bank account so that it is easy to get contributions, make investments and then give out pensions when the time arrives. Like all trusts SMSFs require trustees who can either be an individual trustee or a corporate trustee. Here is how SMSF helps!


Freedom of choice

There are many benefits of an SMSF, one of which is that it gives greater freedom in a person’s finances, and it gives a wide range of choices when it comes to investing the hard earned cash. This allows for better returns if the investment is astute.

Flexibility of choices

SMSFs allow the trustees to change the dimensions of the funding order to mirror any change in the market or the individual lives. This is not given in any other super fund. This flexibility has made them a very popular option with the new generation and those who seek to be self-employed.


Cost effectiveness

The cost of an SMSF usually depends upon the investments that have been made, and the professionals that have been hired for their skills. But when an SMSF is compared to a similar fund with the same professionals engaged and the same investments made, the SMSF will come on the top as the most cost effective one.

Greater transparency

As all SMSFs are created to make sure that all decisions are made according to the personal needs of the trustees and not on the collective benefits required, they allow the investments to be more transparent with the trustees being able to actually have a feel of where their money has been invested and which routes it has taken.

Finance Expert, Writer, Entrepreneur

Tammy Richards is a passionate finance expert who is also a writer and business owner. With over 10 years of experience as a finance expert, Tammy wants to share her knowledge with her readers.

Tammy covers and simplifies a range of financial topics, including how start-ups can raise capital and how established businesses can grow successfully. It is clear that she is firmly on the side of Australian small business owners.
Tammy keeps her fingers on the pulse of financial updates. Through her articles, she regularly shares the latest tips and traps around financial products such as business loans and credit cards. She also delivers her information in an easily consumable and interesting way.

Tammy is a keen advocate of promoting financial literacy. She aims to educate small business owners by providing financial insights into common financial problems that businesses face.

“More than anything, I am enthusiastic about using my experience to help Australian small business owners to achieve their financial and business goals,” she says.

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