SMSF stands for the self-managed super fund. In Australia, superannuation is a way for people to save for their retirement. Like other superannuation funds, a self-managed super fund is simply a way of saving for later in life so people don't have to rely on Government pensions.
There are some particular differences between a traditional superannuation fund and a self-managed one. Most Australians pay into a super fund that is managed by somebody else. This could buy an industry super fund, an employer stand-alone funds or what is called "retail funds".
In contrast, a self-managed super fund in Mount Waverley is a fund where the member of the fund is also the trustee and beneficiary. This means that they run the fund for their own benefit.
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An advantage of setting up your own SMSF is that you can invest your superannuation according to your own preferences. You may be able to follow some innovative investment strategies such as investing in art or commercial property, as long as your investment is compliant with the rules and regulations issued by the Australian Taxation Office (ATO).
SMSF Set Up
However, an SMSF Set-up also has a lot of red tapes associated with it. All self-managed superannuation funds are required to comply with the trust deed and the laws and rules that apply to SMSFs.
The compliance is monitored by the ATO and if a self-managed super fund is found to be non-compliant severe penalties can be issued.
Because the rules and regulations that govern the SMSF set up and maintenance, many people choose to work with an accountant to set-up and manage their SMSF.
Accountants who specialize in self-managed superannuation already know the documentation and administration work that is required for setting up a fund.