Is a Self-Managed Super Fund (SMSF) right for you? In an SMSF, the members are usually the trustees too. Now members can run the fund for their benefit, so you can invest in the fund and reap the rewards too!
While there are usually no limits to the number of members in an SMSF, the trustees, who are also the managers of the fund, sometimes seek professional advisory services to find the best possible investment opportunities for the fund’s money. The reason they need to carefully go through their options before investing the money is quite obvious: the world of finance is complex and every day brings a new investment opportunity with its inventors and designers promising endless profits to their investors.
Fund managers would find the fund the best possible opportunities because they have their own skin in the game, but many funds do not have members with such expertise. In such cases, trustees of SMSFs, especially in case of large funds with thousands of members, seek professional services to manage their investments. Over the years, superannuation investors have come to realise that they have to ensure their investment portfolios stay balanced with a major portion invested in fixed long-term plans where they can expect a substantial profit by the time they retire in many years. With the rest of the money at hand, most SMSF trustees seek short-term profitable opportunities.
Incidentally, high-return short-term opportunities often come with high risk and it is wise to invest only a portion of a fund’s wealth into such avenues. This allows the fund to nicely balance risk and profits, ensuring the members get the most out of their investments without taking unnecessary risks or missing opportunities where the risk was worth it.
Melbourne’s Leading SMSF Setup Experts – When it comes to the problem of going for an SMSF setup, it is prudent to take help from professionals. Whether you acquire the services of your existing accountant or hire an experienced funds portfolio manager, giving this responsibility to somebody with the acumen, education, and training to manage funds is the smart way to go. Interestingly, the process of establishing an SMSF does not include many complex problems. In short, you can set up your own SMSF as well, though this path should only be taken if one of the leading trustees in the fund has a strong background in investments.
The process of establishing an SMSF consists of five key steps in theory. Understanding these steps will help you become a better trust manager for your SMSF even if the job of building the fund’s portfolio does not fall in your lap. Following is a brief description of these steps in the process: