Self-managed super funds (SMSFs) provide a way of saving for your retirement. The difference between an SMSF and other types of fund is that the members of a SMSF are usually also the trustees – meaning that the members of the SMSF run it for their own benefit, but are responsible for all investment decisions and the associated risks, as well as complying with the relevant super and tax laws.
As a trustee you are responsible for running the fund and acting in the best interests of the members. You will need to manage the fund and all its assets separately from your own assets, and may be personally liable to pay an administrative penalty if you don’t follow the laws that apply to SMSFs. You also don’t have access to some of the legal protection that applies to members of other types of super funds.
There are of course a number of (often substantial benefits):
You must be prepared to research and track your super investments regularly if you want to manage them yourself. Super is your investment for your retirement, so don’t rush in – it’s a major financial decision and you need to have the time and skills to do it (or be prepared to engage suitable advisors).
If you’re not positive you can do better yourself than in another fund, you may be better off using another type of fund to provide for your retirement. Either way you should consider professional advice.