Self Managed Super Funds (SMSF) Guidance

GOING YOUR OWN WAY

For many Australians, managing their own Self-Managed Superannuation Fund (SMSF) offers the allure of greater freedom, flexibility, and control—the chance to carve out a financial path that aligns with their unique vision. For others, however, the idea of an SMSF can feel overwhelming due to its complexity. For most, the reality lies somewhere in between.

Consider the following:

The Pros:

Broader investment opportunities, including real property, collectibles, or physical gold, beyond what retail funds offer.
Greater control over the timing of asset purchases and sales.
Potentially lower costs compared to retail or public-offer schemes.
The ability to minimize capital gains tax if assets are sold during the income or pension phase.

The Cons:

Requires active supervision and hands-on management.
Complex rules and regulations that must be strictly adhered to.
Potentially higher costs compared to retail/public-offer funds.
Risk of lower investment returns due to inexperience.

If you have accumulated at least $300,000 in super, are comfortable managing paperwork, and can commit several days a month to managing your fund (both now and as you age), an SMSF could be a viable option. However, before diving into SMSF management, it’s crucial to seek professional advice from a Financial Planner.

COLLABORATION

Ensuring a smooth and stress-free SMSF experience requires careful planning and consistent management. Collaboration is key.

We encourage open communication between all your trusted advisers—Accountants, Lawyers, Brokers, and more. This collaborative approach helps ensure your SMSF is set up correctly and managed seamlessly over time.

At Westmount Financial, we specialize in simplifying the process, helping you integrate the many pieces of SMSF management. By lightening your load, we enable you to focus on what matters most to you.

Yes, running your own SMSF comes with responsibilities, but with the right guidance and support, it can be a fulfilling and rewarding experience.

Setting-up or Winding-up?

Perhaps you’re considering establishing your own self managed super fund (SMSF), or perhaps you already have. There are numerous considerations associated with establishing, running and winding up an SMSF.

This is the fifth in the Your super series of booklets that Macquarie has developed to help you understand how superannuation works and to give you some tips on how you can get the most out of your super.

Read 'Self-managed super funds: from set-up to wind-up' from Macquarie.

A guide to super borrowing

The term ‘super borrowing’ is used to describe when a superannuation fund borrows money to purchase an investment asset.

Borrowing to invest is not a new concept - many investors borrow money in their personal name or via a company or trust structure to purchase sharemarket stocks, managed funds, real property and other investment assets. Borrowing to invest is often referred to as gearing, gearing up, negative gearing, leveraging and a range of other terms. In the superannuation context, a borrowing arrangement is often referred to as a limited recourse borrowing arrangement (LRBA).

Borrowing to invest in super was introduced in 2007. Until then this strategy was generally not available to super funds because the superannuation law prohibited borrowing except in limited circumstances. The law was amended in September 2007 to allow super funds to borrow more broadly and subsequent amendments in 2010 have further clari ed the capacity of super funds to borrow to invest. Today super borrowing is a popular strategy used by many self managed superannuation funds (SMSFs).

This booklet aims to help you understand the pros and cons of super borrowing, including:

why you might enter into a super borrowing arrangement
what the risks are
establishing a super borrowing arrangement
maintaining a super borrowing arrangement
ending a super borrowing arrangement
a detailed case study.

It is generally assumed in this booklet that an SMSF is in existence prior to the consideration of a super borrowing arrangement. Where this is not the case, please also refer to Your super booklet 5 – Self managed super funds: from set up to wind up.

Read 'Self managed super funds: a guide to super borrowing' from Macquarie.

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