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Book a FREE consultation
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Get started with a free strategy consultation and receive a copy of the Good Fortune Guide – written by James McFall, Managing Director Yield FP and 2020 National Finalist Certified Financial Planner of the Year to help educate you on your Financial Plan.

Is a Self Managed Super Fund Right For You?

Is an SMSF right for you? It seems that many of us have already decided that it is.

As it stands, more than 1/3 of Australia’s superannuation money is invested in Self-Managed Super Funds (SMSF).  The primary benefit of an SMSF and therefore the reasonable assumption for why the growth in SMSF is so prolific, is control.

SMSF not only allows you to invest in almost anything you could personally but it also can be very cost-effective and the chosen investment strategy gives the ultimate cost control.

This affords several real potential benefits, particularly at a time that investment markets are so challenging like they are right now, but it also poses several risks, so they are definitely not for everyone.

Below is a graph sourced from Rice Warner research that shows the typical fund balance, where SMSF can become more cost-effective. It would suggest that it can range from as little as $200,000 – $500,000.

CHART 4.4: SMSF AVERAGE OPERATING EXPENSE RATIO, BY FUND SIZE (2012)

is an smsf right for you

What this graph clearly demonstrates is that SMSF can be considerably more expensive than alternatives when balances are low, however from experience, even when balances are larger, costs can still be higher on average and it really depends on the investment strategy employed.

 

With this in mind, the decision to set up a SMSF should be balanced with ‘Why’ you want to set a smsf up and particularly ‘How’ you intend to approach your investment strategy. Weighing this up against the costs associated to the strategy and any potential for outperformance the chosen strategy could derive, will then ultimately dictate how appropriate it is.

 

By James McFall – Founder Yield Financial Planning

 

“GOOD FORTUNE NEEDS GREAT PLANNING”


GENERAL DISCLAIMER:

The content of this presentation is intended to be general information only and has been prepared without taking into account any person’s objectives, financial situation or needs. Each person should consider its appropriateness having regard to these matters or obtain relevant professional financial advice before making any financial decisions.  Examples are illustrative only. Each person should obtain any relevant professional financial, taxation and social security advice before making any financial decisions.

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About Yield - Financial Planner Melbourne

Who we serve – We help time poor professionals and business owners who intuitively know they should be doing more to improve their financial position and are seeking an expert to guide them on financial planning strategies. Our clients want personalised financial planning advice and to feel empowered and confident that they can achieve a secure transition to retirement.

What we do – We gain a deep understanding of your current financial position and preferences, what you value and want to achieve. We then help you develop a highly personalised financial plan, to show you how to make your money work harder for you. Ongoing we regularly monitor and measure progress against your plan projections, to show you how you’re tracking and help you manage change to your advantage.

How we do it – We apply our proven expertise in investment markets (Shares & Property), Tax and Debt structuring, Retirement Planning, Risk management and Estate planning, to help you reorganise the way you use your money to achieve your desired outcomes.

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