OVERVIEW

Self-managed superannuation funds (‘SMSFs’) have become increasingly popular and now represent the largest proportion of superannuation assets across all superannuation types. From June 2010 to June 2011, approximately 32,619 new SMSFs were established taking the total number of SMSFs to over 456,472.

This is not surprising as SMSFs offer a low tax environment to grow retirement savings and offer many planning opportunities that are not possible with retail, public sector and industry funds.

A self-managed superfund gives you the ability to control the way your retirement funds are invested.  This empowers you to make changes to the way your funds are invested as you see fit.

IS A SMSF RIGHT FOR YOU?

A SMSF, while offering many opportunities, may not be for everyone. All SMSFs are highly regulated by the Australian Taxation Office (‘ATO’) and must comply with the regulations contained in the Superannuation Industry (Supervision) Act 1993 (the ‘SIS Act’).  Anyone contemplating setting up a SMSF needs to carefully consider not only the potential opportunities of holding wealth through a SMSF but also the obligations imposed on trustees and the costs of administering the SMSF to ensure it is compliant with the SIS Act.

Unity Advisors will spend time clients contemplating setting up an SMSF to ensure they understand the advantages and obligations involved before they make any decision to establish an SMSF.

Unity Advisors can assist you establish and administer your SMSF

If you decide an SMSF is the best option for you, Unity Advisors can assist with the establishment of an SMSF.

The steps required to establish a SMSF include:

  • Constructing a trust deed
  • Appointing trustees
  • Electing for the fund to become a regulated fund
  • Obtaining a tax file number and an Australian Business Number, and registering for GST
  • Formulating an investment strategy for the fund
  • Holding assets and establishing a bank account
  • Obtaining insurance, and
  • Appointing an auditor.

Once you have established your SMSF, Unity Advisors can ensure your continuing compliance obligations are met by preparing compliant financial reports and the preparation and lodgment of the fund’s income tax returns and activity statements.

SMSF STRATEGIES

One of the most important steps in establishing a SMSF is formulating an investment strategy. This provides the SMSF’s trustee a framework for making investment decisions.

An SMSF’s investment strategy must:

  • Reflect the purpose and circumstances of the SMSF, including the fund’s objectives, expected cash flow and liquidity requirements
  • Be appropriately diversified across the asset classes
  • Ensure that the fund can pay benefits and other costs as they fall due, and
  • Meet the needs and objectives of all members

The investment strategy should consider the following three key areas in context of each member:

  1. retirement income planning
  2. estate planning
  3. disability planning

The level of assistance you may require in formulating an investment strategy will really depend on your personal circumstances, financial knowledge and experience.

You may already have a clear understanding of all the above points and therefore require minimal assistance in formulating your investment strategy or you may have a high level strategy in mind but require further assistance to clarify particular issues or advice on a specific financial product.  Or you may require a complete review of your situation and guidance on the options and strategies applicable to your particular circumstances.

Whatever your needs, Unity Advisors are committed to ensuring you have the optimal strategies in place for you.

WORKING WITH FINANCIAL PLANNERS

Unity Advisors are more than willing to collaborate with financial planners in formulating or modifying your investment strategy, both in the context of you SMSF and your other personal and business assets.

Where you require advice on a particular financial product we highly recommend you seek the advice of an independent financial planner.  If you do not have a financial planner, Unity Advisors are able to refer you to a financial planner that will best suit your needs.  Any financial planner recommended by Unity Advisors comes from a select group of highly respected and reputable planners.