Advantages & Disadvantages of a Self-Managed Super Fund




The main advantages of a SMSF are outlined below:


  • Having control over the fund, including the investments within the fund. This allows you to tailor an investment strategy that suits your circumstances. Advice should be sought if required.
  • Having a wide range of investment options, including direct shares and direct property. In some circumstances the fund can purchase assets from members of the fund, allowing better consolidation of investment assets.
  • More flexible strategies are available within a SMSF to manage these issues than those which exists with retail super funds.
  • A SMSF can be tailored to meet your own personal circumstances in relation to estate planning. You can include family members as long as there are no more than 4 members in the fund at any given time.
  • A SMSF can be used as a vehicle to accumulate superannuation benefit whilst employed and can be maintained well into retirement and beyond, particularly where there are other family members in the fund.



Despite the many advantages, a SMSF is not appropriate for some people. Disadvantages of a SMSF are outlined below:


  • The responsibility of being trustee of your own fund. Considerable amount of work is required in relation to meeting administration and compliance requirements as well as managing and researching investments. These obligations are onerous and explained further below. Although you may outsource the performance of some of these obligations to a service provider you retain responsibility (as the fund’s trustee) for meeting the requirements of the law.
  • SMSFs have no access to the Superannuation Complaints Tribunal. This means that conflicts between Trustees will need to be resolved privately.
  • SMSFs are also not entitled to claim a grant for financial assistance from the Government/Regulator in the event of a loss of funds through fraud or theft.