Quick Look
• Focus: Understand what’s involved in running a Self Managed Super Fund (SMSF) — and whether it’s worth it
• Key Takeaways:
SMSFs give you more control, but come with legal duties and ongoing costs
Trustees must follow strict rules, including audits, investment limits, and reporting
SMSFs are typically only cost-effective with balances of $250,000+
• Reading Time: ≈ 8 minutes
Introduction
Thinking about setting up your own super fund? A Self Managed Super Fund (SMSF) can offer more control and flexibility — but also brings more responsibility.
Unlike traditional funds, where professionals manage your money, an SMSF puts the decision-making in your hands. That includes what to invest in, when to buy and sell, and how the fund complies with the law.
This article outlines what it really takes to set up and run an SMSF — including costs, rules, and the fine line between control and compliance.
Context & Problem
More Australians are exploring SMSFs to take charge of their retirement savings. As of 2024, over 600,000 SMSFs are registered in Australia (ATO).
But the appeal of control can sometimes overshadow the complexity. SMSFs are regulated super funds, and trustees are personally responsible for compliance. Mistakes can lead to penalties, tax issues, or even disqualification.
SMSFs can work well for the right people — but they’re not for everyone.
Strategy & How To
Here’s what’s involved when setting up and managing an SMSF:
Trust Deed: The legal document that outlines how your SMSF operates. Must be tailored to your fund’s purpose and updated if laws change.
Trustees: You can have up to 6 members. All members must also be trustees (or directors of a corporate trustee).
Structure: Choose between:
Individual trustees — lower setup cost, more admin if someone leaves
Corporate trustee — slightly higher cost, better continuity and asset separation
Registration: Must register with the ATO, get a Tax File Number (TFN) and Australian Business Number (ABN)
Trustees are legally responsible for:
Acting in the best interest of members
Creating and reviewing an investment strategy
Keeping records and lodging annual returns
Arranging an independent audit every year
Ensuring investments comply with the sole purpose test (i.e. only for retirement benefit)
Trustees must also sign a declaration acknowledging their legal duties within 21 days of becoming a trustee (ATO requirement).
SMSFs can invest in a wide range of assets — but must follow strict rules:
Shares, managed funds, term deposits, and cash are all allowed
Property is allowed, but:
Must be held at arm’s length (no personal use)
Must not be rented to related parties (except under strict conditions)
Collectables (e.g. artwork, wine) are allowed but rarely practical due to storage and insurance rules
Crypto is permitted but must be traceable and reported correctly
Important: You can’t use SMSF money for personal benefit. This includes early access, loans to members, or using fund assets yourself.
You’re responsible for all operating expenses. These include:
Setup and legal fees: ~$1,000–$2,000
Ongoing admin/accounting: $2,000–$3,500 per year
Independent audit: ~$300–$600
ATO levy: $259 annually (ATO, 2024)
Additional costs if investing in property (e.g. legal, property management, SMSF loan setup)
General Rule of Thumb: SMSFs only become cost-effective above $250,000 in combined member balances (based on ASIC guidance).
Greater investment choice, including direct shares and property
May suit business owners wanting to own their premises in super
Flexibility with pensions and estate planning
Control over timing of investments and withdrawals
Legal liability sits with you, not a fund manager
Compliance mistakes can trigger ATO penalties or loss of concessional tax treatment
Running costs can eat into returns, especially with low balances
Time and complexity often underestimated
Common Questions & Misconceptions
“Can I manage my SMSF entirely myself?”
Legally yes — but most trustees use accountants, auditors, or SMSF administrators for help. DIY management without professional support is risky.
“Can I live in or rent out an SMSF property to family?”
Usually no. Property must meet the sole purpose test and be held at arm’s length. Very limited exceptions apply (e.g. commercial premises).
“Is it cheaper than an industry fund?”
Only if your SMSF has a large enough balance. Industry funds often charge low percentage-based fees, which can be more cost-effective at lower balances.
“Can I set up an SMSF to buy crypto?”
Yes — but strict recordkeeping and valuation rules apply. You must show clear separation between personal and SMSF assets.
Conclusion
An SMSF offers serious control — but also serious responsibility. It’s a legal structure, not just an investment account, and it only suits those who are ready to manage the risks and costs.
If your balance is approaching $250,000 and you have clear goals for managing your retirement wealth, it may be worth exploring further. But don’t go it alone — get advice before making the leap.
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Disclosure: General information only. Consider your objectives, financial situation and needs, and seek professional advice before acting.
How We Keep It Trustworthy
Every article includes a Review & Fact Check section below — so you know exactly where our facts come from, what’s uncertain, and whether there’s any bias.
Review & Fact Check
Fact References
• SMSF rules and duties – ATO: Self-managed super funds (ato.gov.au)
• Cost-effectiveness threshold – ASIC: SMSFs – Are they right for you? (moneysmart.gov.au)
• ATO supervisory levy – ATO: SMSF annual return instructions 2024
• Trustee declaration requirement – ATO: SMSF trustee obligations
Unverified or Inconclusive Items
• Annual running costs vary depending on investment strategy and service providers — not all SMSFs cost the same
Time Sensitivity
• ATO caps, levies and rules may change annually — always check the latest from the ATO and ASIC
Bias Assessment
• Neutral and educational — encourages informed decision-making and compliance awareness, not product promotion
Super
20th May 2025
Quick Look
Focus: What it really takes to run your own super fund—from rules and costs to responsibilities.
Key Takeaways :
Introduction
A Self-Managed Super Fund (SMSF) gives you full control over how your super is invested—but that control comes with legal, financial and administrative responsibilities.
They’re not for everyone. But for some Australians, an SMSF can offer strategic tax planning, direct property investment, or more flexibility in retirement.
Let’s break down what’s involved so you can decide if it’s worth exploring further—or better left to the professionals.
Context & Problem
Many Australians like the idea of “taking charge” of their super. But managing your own fund means playing by strict rules.
If you don’t understand these rules or break them—even accidentally—you could face serious penalties, including losing your fund’s tax concessions. Although the Australian Tax Office provides more than ample opportunity to rectify deficiencies, if the tax concessional treatment is lost eventually lost, the implications are huge. The highest marginal tax rate (which is currently 47%) is applied to all contributions and earnings over the lifetime of the fund and the fund would then incur the 32% tax difference on its total value and, depending on how much is in the fund, this could be a figure of hundreds of thousands of dollars.
An SMSF only makes sense when:
It’s not a “set and forget ”structure. The ATO treats SMSFs like small businesses—with annual audits, trustee duties, and legal obligations.
An SMSF is a trust set up to manage retirement savings. It must:
Trustees are legally responsible for:
Each year, your SMSF must be audited by an ASIC-registered SMSF auditor. Audits typically cost between $400 and $800, depending on complexity. Further more, direct real estate must have a verifiable valuation every year
You can choose where to invest, but there are rules. SMSFs can invest in:
But:
Ongoing SMSF costs may include:
So even a basic SMSF may cost $1,500–$4,000+ per year—and more for complex funds.
Most experts suggest SMSFs are only cost-effective when you have a super balance of $250,000+. Below and above that, retail or industry funds tend to offer better value.(Source: ASIC’s Money Smart SMSF calculator)
Many proponents of SMSF promote them to access the benefits of the leverage of borrowing to invest in property to accelerate growth of the fund value. (refer to our library of articles about this).
Case: Jill and Marcus, both age 52, combined super balance $580,000
First-year costs:
Outcome
Their fund now holds an ETF portfolio and a commercial unit leased to Jill’s business (at market rates). They review compliance with their accountant annually.
Their SMSF gives them full control, but they spend about 10 hours a quarter on paperwork and administration.
Can I buy a house in my SMSF and live in it later?
No. Residential properties in an SMSF can’t be used by members or related parties, even after retirement.
Is an SMSF always cheaper than a retail fund?
Can I run my SMSF like a trading account?
What happens if I make a mistake?
Running your own SMSF can offer unmatched control— but it’s not a shortcut to better super performance.
It requires discipline, time, and a solid understanding of legal duties. If you’re just after lower fees or better returns, a low-cost super fund might still be a better fit.
But if you’re clear on your strategy, willing to do the work, and have a balance that justifies the costs—an SMSF could be a powerful way to take ownership of your financial future.
Is your super invested in the right option?
Money GPS helps you assess whether your current investment mix aligns with your goals, timeframe and risk tolerance.
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Need Full Scope Financial Planning?
If you think you might need a holistic roadmap that leaves nothing out, consider booking a discovery meeting with a fully licensed Financial Planner.
Book a discovery call with Planning IQ today and take the first confident step towards comprehensive wealth management.
Disclosure: General information only. Consider your objectives, financial situation and needs, and seek professional advice before acting.
How We Keep It Trustworthy
Every article includes a Review & Fact Check section below—so you know exactly where our facts come from, what’s uncertain, and whether there’s any bias.
1. Fact References
2. Unverified or Inconclusive Items
3. Time Sensitivity
4. Bias Assessment
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