Self-Managed Super Fund (SMSF) Setup Guide

What Is an SMSF?

A Self-Managed Super Fund is a private superannuation fund that you manage yourself. Unlike retail or industry super funds, you (as trustee) make all the investment decisions. An SMSF can have up to six members, and all members must be trustees (or directors of a corporate trustee).

Is an SMSF Right for You?

An SMSF may be suitable if you have a combined super balance of at least $200,000–$500,000 (to justify the costs), you want control over your investment strategy, you're comfortable making financial decisions, you want to invest in assets not available through retail funds (e.g., direct property), and you're willing to take on the legal responsibilities of being a trustee.

An SMSF is probably not right for you if your balance is small, you don't want to be involved in investment decisions, or you're not prepared for the ongoing compliance obligations.

Steps to Set Up an SMSF

1. Choose your trustees: Decide between individual trustees or a corporate trustee (a company that acts as trustee). A corporate trustee offers better asset protection and is easier to manage when members change.
2. Create the trust deed: This is the legal document that establishes the fund and sets out the rules. It must comply with super legislation.
3. Register with the ATO: Apply for an ABN and TFN for the fund, and elect to be regulated by the ATO.
4. Open a bank account: The fund needs its own dedicated bank account — all contributions and investment income must flow through it.
5. Create an investment strategy: A written investment strategy is a legal requirement. It must consider diversification, liquidity, risk, and the members' circumstances.
6. Roll over your existing super: Transfer your super from existing funds into the SMSF bank account.

Ongoing Costs

Typical annual costs for an SMSF include an annual audit (required by law), accounting and tax return preparation, ASIC fees (if using a corporate trustee), and investment management costs. Total annual costs typically range from $2,000 to $5,000 depending on complexity.