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Ins and outs of Self Managed Super Funds

Our strategic partner, Elston, created this Self Managed Super Funds (SMSF) overview. Self Managed Super Funds (SMSFs) have gained immense popularity in Australia. According to ATO figures, as of February 2024, SMSFs collectively held $87.6 billion, which represents over a quarter of all super assets.


But just because 'everyone else' is doing it, does that mean you should too? FOMO is never a good reason to make a significant investment decision.

At Elston, we see the positives in SMSFs, and we've helped many people take advantage of their benefits. However, we don't believe that SMSFs are for everyone.

In this article, we'd like to explore the positives and some of the things that must be considered before you take on an SMSF.

Several factors have contributed to the widespread adoption of SMSFs:


As an SMSF trustee, you have some autonomy when selecting investments, monitoring performance, and managing contributions and withdrawals. This could allow you to consider investment options beyond shares, including commercial properties and, in some circumstances, collectibles.

SMSFs are also tailored to the specific needs of the individuals involved. This means that managing cash flow in retirement can be customised to match the income levels enjoyed during one's working years.

Tax Advantages:

SMSFs can offer attractive tax advantages. With more control, SMSF trustees can optimise tax strategies, minimising tax liabilities or maximising refunds. This level of tax efficiency is particularly appealing to those accustomed to shouldering significant tax burdens.

According to the ATO, from 2019 to 2020, SMSFs received $4.5 billion in tax concessions. These benefits include:

  • Concessional contributions are taxed at 15%.

  • Income tax exemptions for funds in the complete pension phase.

  • Potential capital gains tax (CGT) exemptions and tax offsets


SMSFs provide visibility into the fund's investments, empowering trustees with real-time knowledge of their financial position. This transparency can give you greater confidence. You can see how your money is being invested and how the assets in your portfolio are being actively managed and monitored.


What are the establishment costs for a self-managed super fund? What are the ongoing costs? And how do they compare to the super structure you currently have? Technological advancements and online automation can make the SMSF set-up process quite cost-effective for you. On the other hand, if the balance in your super fund is too small, the cost savings might not be as attractive as you had hoped. Dig into the numbers and make sure it all adds up.

Multi-Member Funds:

SMSFs can pool super balances in multi-member funds. This is often adopted by couples and families. In fact, 76% of SMSFs comprise two or more members. This pooling method can reduce fees.

Professional Support:

While SMSFs offer autonomy, trustees can still benefit from professional advice and support. Engaging a skilled adviser allows you to explore and enjoy an SMSF's benefits and pass the administrative burden on to an experienced team.

Things to consider:

In summary, SMSFs can offer greater control, more tailored investment options, potential cost savings, and tax advantages. They also provide the opportunity to pool super balances in multi-member setups. However, it is essential to remember that as the trustee of an SMSF, you are taking on significant responsibilities. This is why professional advice should always be sought before you set things in motion.

Don't rush into a self-managed super fund. At Elston, we've met new clients who have taken on an SMSF without seeking advice. As a result, they have not fully understood the pros and cons. In some situations, their super balance is too low, and they've probably moved too soon. This could be because they've seen SMSFs' popularity and didn't want to 'miss out.' But of course, you should never let FOMO influence your decisions.

Gather all the facts so you can make informed decisions. Elston has highly credentialed SMSF specialists who can guide you through the complexities of structuring and managing a Self-Managed Super Fund (SMSF). If you want to know more, talk to an Elston adviser today.



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