SMSF Investments

Recently I’ve had a number of clients enquire about the pros and cons of setting up a Self-Managed Super Fund (SMSF). They have an instinct to get more control over their investments in Super. But they’re hesitant about the additional work involved in running a SMSF and are unsure of the costs.

There’s no perfect answer to the question, assuming one has sufficient funds to make it cost-effective. Anecdotally, I have seen a broad range of SMSF outcomes.

Some are pretty dysfunctional. Large long-term cash allocations, a jumble of different assets cobbled together over time, or speculative investment properties in far flung mining towns that are well underwater.

Conversely, some are fantastic. Low relative administration costs, a thoughtful spread of investments, and a clear strategy that is able to differentiate from the increasingly herd-like solutions being offered by the big retail and industry super funds.

Three reflections I have from seeing successful SMSFs in the wild:

1. Have a plan:

Running a SMSF well requires careful planning and a clear investment strategy. This is the cost of admission to the wide-world outside the walls of the retail/industry superfunds. A clear plan is crucial for SMSF trustees to help with consistent, long-term decisions, particularly in difficult investment markets.

2. Utilise the flexibility:

The main structural benefit of a SMSF is that it opens up the potential range of investment options available to you. SMSF trustees are able to invest in a much wider range of listed investments, real property, and alternative assets. This is increasingly attractive to many in a landscape of low yields and volatile equity markets.

3. Collaborate:

Finding the right professional team to help manage the administration and strategy of the SMSF can make all the difference between building a sustainable fund, and getting burnt out by the increased complexity. While some trustees are die-hard DIY’ers with a focus on reducing fees at all cost, most will benefit from working with a professional team of accountants and advisers.

SMSFs can be a great structure for investors wanting to get more control over their retirement savings. The added responsibility of running a SMSF can be challenging, but it can also serve as a good reminder that our retirement savings are real-life investments, and we will buy our groceries from their returns at some point (if we aren’t already).

Need some help?

PJ Cameron - Financial Adviser Launceston Tasmania
Peter-James (PJ) Cameron
Financial Adviser

PJ provides proactive, strategic advice to help you invest with confidence, structure your affairs intelligently, and get the most out of your unique circumstances.

Based in Launceston, PJ provides financial advice across the whole of Tasmania. Contact us today to arrange a meeting.

Peter-James Cameron is a Sub-authorised Representative (#1266801 ) of Synectic Wealth Pty Ltd (ABN 24 615 317 194) which is a Corporate Authorised Representative (#1250871) of Alliance Wealth Pty Ltd (ABN 93 161 647 007 | AFSL 449221) Synectic Wealth Pty Ltd is the financial services division of Synectic. Learn more here.

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