Are you tired of watching your superannuation balance fluctuate at the mercy of fund managers who don’t share your financial goals? Perhaps you’ve wondered if there’s a way to take the reins of your retirement planning and steer it in a direction that truly aligns with your vision. You’re not alone.
More Australians than ever are discovering the empowerment that comes with managing their own retirement future through a Self Managed Super Fund (SMSF). It’s like upgrading from being a passenger to becoming the pilot of your financial journey – a shift that can be both liberating and rewarding.
At Aries Financial, we believe that financial control isn’t just about making money; it’s about creating the freedom to make choices that reflect your values and goals. Our philosophy of integrity, expertise, and empowerment guides everything we do as we support SMSF trustees, property investors, financial advisors, and business owners on their path to financial independence.
Understanding Self Managed Super Funds: Your Fund, Your Rules
“An SMSF gives you the freedom to chart your own course for retirement, aligning your superannuation investments with your unique financial goals and circumstances.”
Before diving into how to setup SMSF yourself, let’s clarify what an SMSF actually is. Simply put, an SMSF is a private superannuation fund that you manage yourself, rather than having a professional fund manager control it. This puts you in the driver’s seat, giving you direct control over investment choices, costs, and strategies.
The “self-managed” part is key – you and the other members of your fund (up to six people in total) are responsible for complying with superannuation and tax laws, making investment decisions, and ensuring the fund is managed for the sole purpose of providing retirement benefits to members.
Trustee Structure Options: Individual vs. Corporate
When you decide to setup SMSF yourself, one of your first major decisions will be choosing between individual and corporate trustee structures. Let’s break down what each means:
Individual Trustee Structure:
- All members of the fund must generally be trustees
- Lower setup costs (no need to establish a company)
- Less paperwork and lower annual ASIC fees
- Simpler to establish initially
“I chose an individual trustee structure when I first set up my SMSF because it was cost-effective and straightforward,” shares Michael, a property investor and SMSF trustee. “However, as my fund grew and I wanted to invest in property, I realized there were limitations I hadn’t considered.”
Corporate Trustee Structure:
- A company acts as the trustee with members as directors
- Easier to manage membership changes (no need to change property titles)
- Better asset protection and succession planning
- Administrative continuity if a member passes away
- Preferred option for property investment within SMSFs
While the individual trustee structure might seem appealing due to its lower initial costs, approximately 80% of SMSFs opt for a corporate trustee structure for its long-term benefits and flexibility, especially when planning to invest in property.
The 7-Step Blueprint to Setup SMSF Yourself
✅ SMSF Blueprint Overview
Follow these 7 steps to successfully establish and manage your Self Managed Super Fund with confidence.
Ready to take control? Let’s walk through the seven essential steps to setup SMSF yourself. Don’t worry – we’ve broken it down into manageable pieces that anyone can follow.
Step 1: Determine If an SMSF Is Right for You
Before diving in, ask yourself:
- Do you have sufficient superannuation assets? (Generally, a minimum of $200,000 is recommended to make an SMSF cost-effective)
- Do you have the time, knowledge, and interest to manage your fund?
- Are you comfortable with the legal responsibilities of being a trustee?
- Do you understand the investment risks and compliance requirements?
“Setting up an SMSF isn’t for everyone,” explains Sarah, a financial advisor. “It’s like deciding to build your own home instead of buying one. There’s more control, but also more responsibility. Make sure you’re ready for both.”
Step 2: Appoint Trustees or Directors
Once you’ve decided an SMSF is right for you, it’s time to:
- Choose between individual trustees or a corporate trustee structure
- If going with a corporate trustee, establish a company with ASIC
- Ensure all fund members consent to being trustees or directors
- Sign trustee declarations within 21 days of appointment
Step 3: Create a Trust Deed
Think of the trust deed as your SMSF’s constitution – it sets out the rules for how your fund will operate. This legal document must be:
- Prepared by a qualified legal professional
- Properly executed according to state or territory requirements
- Signed and dated by all trustees
- Regularly reviewed and updated as needed
Your trust deed will cover crucial aspects like:
- How to appoint and remove trustees
- How benefits can be paid to members
- Investment powers of trustees
- Procedures for meetings and decision-making
Step 4: Register Your SMSF with the ATO
Now it’s time to make things official with the Australian Taxation Office (ATO):
- Apply for an Australian Business Number (ABN)
- Register for Tax File Number (TFN)
- Elect to be regulated by the ATO
- Register for Goods and Services Tax (GST) if necessary
- Consider the need for Small Business Superannuation Clearing House
This step typically takes a few weeks, so patience is key. The good news is that much of this process can be completed online through the ATO’s Business Portal.
Step 5: Open a Dedicated SMSF Bank Account
Your SMSF needs its own bank account to:
- Accept contributions and rollovers from existing super funds
- Pay for fund expenses and investments
- Keep fund assets separate from personal assets (critical for compliance)
- Maintain clear records for auditing purposes
“When I helped setup SMSF myself, opening a dedicated bank account was straightforward but incredibly important,” notes David, a business owner. “It creates a clear boundary between personal and fund money, which is essential for compliance.”
Ensure the account is opened in the name of your SMSF trustees “as trustees for” your fund name. For example: “John Smith and Jane Smith as trustees for the Smith Family Superannuation Fund.”
Step 6: Fund Your SMSF
With your structure in place, it’s time to transfer money into your SMSF:
- Roll over existing superannuation from retail or industry funds
- Set up employer contributions to your new SMSF
- Make personal contributions according to contribution caps
This process can take several weeks, particularly when rolling over from existing funds. Be patient and follow up if necessary. Remember that your fund isn’t operational until it has assets.
Step 7: Create and Implement Your Investment Strategy
Perhaps the most exciting step when you setup SMSF yourself is creating your investment strategy. This must be:
- In writing and tailored to members’ needs
- Considerate of risk, return, diversification, and liquidity
- Reviewed regularly, especially when circumstances change
- Compliant with superannuation investment restrictions
Your strategy might include investments in:
- Australian and international shares
- Residential or commercial property
- Cash and fixed interest
- Managed funds
- Other permissible investments
At Aries Financial, we’ve seen how strategic property investment within an SMSF can create significant wealth when done correctly. Our expertise in SMSF lending helps trustees navigate the complexities of property investment within the superannuation environment.
Managing Your SMSF: Ongoing Responsibilities
Successfully setting up your SMSF is just the beginning. The ongoing management requires attention to:
Financial Records and Reporting
You must:
- Keep accurate and detailed financial records
- Prepare annual financial statements
- Lodge an annual SMSF return with the ATO
- Arrange for an independent audit each year
“The record-keeping aspect surprised me,” admits Jennifer, an SMSF trustee. “I knew I’d need to keep records, but the level of detail required is significant. It’s worth setting up good systems from day one.”
Compliance Obligations
As a trustee, you’re legally responsible for ensuring your fund complies with all relevant laws:
- Adhering to the sole purpose test (operating the fund only to provide retirement benefits)
- Following investment restrictions (e.g., related party transaction rules)
- Meeting preservation requirements
- Paying minimum pension payments when applicable
- Keeping up with changing regulations
Investment Management
Your ongoing duties include:
- Regularly reviewing your investment strategy
- Making investment decisions in accordance with your strategy
- Monitoring performance and adjusting as needed
- Ensuring investments are properly diversified
- Maintaining appropriate insurance coverage for members
At Aries Financial, we understand that property investment within SMSFs requires special consideration. Our specialized SMSF lending solutions are designed to support trustees in building wealth through strategic property investment while maintaining compliance.
The Balance Sheet: Benefits and Risks of Setting Up Your Own SMSF
Pros
Cons
### The Benefits
- Control: Direct decision-making over your investments
- Flexibility: Wider investment options, including direct property
- Tax Efficiency: Potential for tax-effective strategies
- Cost Effectiveness: Potentially lower fees for larger balances
- Estate Planning: More options for managing your superannuation legacy
- Transparency: Clear visibility of investments and performance
The Risks
- Responsibility: Legal obligations and compliance requirements
- Time Commitment: Ongoing administration and management
- Knowledge Required: Need to understand superannuation and investment principles
- Costs: Setup and ongoing expenses that may outweigh benefits for smaller funds
- No Compensation Scheme: Not covered by government compensation arrangements for fraud or theft
Taking Control of Your Retirement Future
Setting up and managing your own SMSF represents a significant step toward financial empowerment. It’s a journey that requires commitment, knowledge, and responsibility – but the potential rewards of control, flexibility, and tailored investment strategies make it worthwhile for many Australians.
When you setup SMSF yourself, you’re not just creating an administrative structure; you’re building a foundation for your financial future. At Aries Financial, we believe in empowering SMSF trustees with the knowledge and tools they need to succeed. Our client-first approach means we’re always focused on your long-term financial security.
Whether you’re considering setting up an SMSF or looking to optimize your existing fund through strategic property investment, remember that the right guidance can make all the difference. With integrity, expertise, and a commitment to your financial empowerment, Aries Financial stands ready to support you on your SMSF journey.
Your retirement future is too important to leave in someone else’s hands. With the right approach and support, setting up your own SMSF can be the first step toward taking control and creating the retirement you truly desire.
