Self managed super funds

Do you want to buy direct property and shares within an SMSF? Do you want to invest and have control of your own fund? Or do you simply want to go through the hassles of creating an SMSF just to have your investments sitting in cash? Don\’t create an SMSF because everyone is doing so.

Many of our clients create an SMSF for the right reasons. Generally a SMSF provides significant control and is one of the key reasons they are established. Control results from a requirement that all members are to be either an individual trustee or a director of the corporate trustee.

The most important part of running a complying SMSF is that it creates a solid foundation for the fund right from the beginning. Members should be fully involved in this process and know why each step is being taken as an important part of learning about their fund, the superannuation rules in general and their responsibilities as trustee.

Some of the suggested steps required to set up an SMSF are:

  • Create a trust deed
  • Appoint a trustee
  • Record the member\’s tax file number
  • Open a bank account
  • Register with the ATO
  • Prepare an investment strategy.

Suitability of a Self Managed Super Fund

At Investlink Group we firstly advise on the suitability of an SMSF for our clients and explain the procedures to establish a fund. An SMSF may be suitable for people who have:

  • Sufficient assets invested in superannuation to achieve the cost efficiencies required to make an SMSF viable
  • Wish to control their funds investments
  • Have the time, interest and ability to establish and maintain a fund in accordance with all the various rules and regulations.

Trust Deed

Our conversations are around issues to be included in the funds trust deed. Having a well drafted trust deed that clearly sets out the rules of a fund is vital in efficiently running a fund. A well drafted deed not only assists trustees to operate a fund in a smooth and efficient manner but it also allows trustees to use a SMSF structure to its best advantage, maximizing control and flexibility.

We understand and stress the importance that a trust deed contain the specific provisions that will allow members to achieve their strategic objectives, such as:

  • Establish investments reserves
  • Allow distributions of life insurance proceeds at the trustees discretion
  • Pay pensions or pay a death benefit as an income stream.

Some of the issues an \’up to date\’ trust deed may deal with:

  • Who can be member of the fund
  • Rights to amend a deed
  • Who can make contributions
  • Types of contributions that can be received
  • The ability of members to split concessional contributions with their spouse
  • What type of assets can be required
  • The ability of a fund to borrow members investment choice availability
  • When benefits can be paid
  • Ability to make internal rollovers
  • How the benefits can be paid i.e. Lump sum and or income stream
  • Acceptance of binding death nominations
  • To whom the death benefits can be paid
  • When and how a fund should be wound up.

Rollovers and Investments strategies

Members, as trustees, are required to determine the investment strategy of a fund and are responsible for selecting which investments their funds will acquire. This not only allows trustees to invest in traditional asset classes such as shares and property, but can also allow access to alternative investments such as artwork, collectibles, or investments related to the member\’s business.

Given that you would be rolling existing super funds into a SMSF account, we organize rollovers and help in developing and assisting an investment strategy for the fund. There is always a danger that trustees will not give due consideration to an appropriate investment strategy, and accordingly, medium to long term returns may be lower than those achieved from a retail superannuation fund. Trustees of a superannuation fund are required to formulate and give effect to an investment strategy for the fund, which has regard to the whole of the circumstances of the fund including:

  • Risk and return
  • Diversification
  • Liquidity
  • The ability of the fund to discharge its liabilities.

Effect an insurance policy

The trustees of an SMSF should effect life insurance cover as soon as possible where the members require insurance cover within the fund. In the event of a claim, the trustee should discuss \’how the insurance cover is to be distributed?\’ to the members or their dependents.

Where Does Investlink Group Fit In?

Choosing the right superannuation fund is a very important decision that people all too often tend to overlook. Most of us want to maintain our standard of living during retirement, hence we should focus on superannuation as an investment for our future. However, the decision of what fund to select, isn\’t always easy. Fees need to be compared, the investment options need to be aligned with personal requirements and an individual\’s risk profile.

Investlink Group Pty Ltd utilizes a wide range of tools, resources, extensive research databases, and industry contacts to enable the complete delivery of our SMSF services. We specialize in providing advice on the options available within self-managed superannuation funds (SMSFs).

Many customers rely on us for support and assistance. We provide the answers to the technical questions and ensure accounting, taxation and compliance requirements are met. We provide expert advice relevant to your circumstances. Contact us now, and we would be glad to assist you in securing a comfortable, stress free SMSF account.

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