SMSFs are the fastest growing sector in the superannuation industry, with approximately 566,735 funds at 31 December 2015. The sector also accounts for approximately 29% of all superannuation savings. However, the current popularity to SMSFs does not mean that they are the right choice for your retirement savings.
A key driver of individuals switching to SMSFs is the wish to gain control over investments. Nevertheless, gaining control over your investments is a trade-off – you take on obligations to operate and manage your SMSF within the bounds of the law. This requires commitment, a significant amount of time and a hands-on approach.
SMSFs are also complex - even seasoned SMSF members require assistance from SMSF professionals, such as SMSF Specialist Advisors (SSAs). Switching to an SMSF also means that you lose out on benefits available to traditional (or ‘APRA-regulated funds’), such as access to some compensation schemes.
Having said that, for the right individual, taking control of your retirement goals with an SMSF is extremely rewarding. This segment will help assess whether an SMSF is the ‘right fit’ for you by educating you about the risks and benefits of an SMSF.