If you’ve spent any time on finance forums or in certain corners of social media lately, chances are you’ve heard about self-managed super funds (SMSFs) . They’ve gained a kind of mythical status – promising control, flexibility, and tax perks galore.
But just because they’re trending doesn’t mean they’re the right choice for everyone. Managing your own super can come with serious time commitments, strict compliance rules, and eye-watering costs if you’re not careful.
In this episode of the Get Rich Slow Club podcast, Tash and Ana take a balanced, no-nonsense look at SMSFs. Whether you’ve got a specific investing strategy in mind or you’re simply curious about whether it’s worth switching from your current super fund, this episode is packed with practical info and thoughtful insights. Let’s dive in.
What is an SMSF?
As Ana explains, “A self-managed super fund – so an SMSF – is a private superannuation fund that individuals manage themselves. Rather than relying on an industry or a retail fund, you’re essentially managing it yourself.”
You can have up to six members in an SMSF, and everyone involved is either a trustee or a director of the fund’s corporate trustee. Unlike industry or retail funds, SMSFs are regulated by the ATO , not APRA . But the goal is the same: to save for retirement.
Why would someone want one?
One of the main reasons people set up an SMSF is control.
“You can pick any shares, ETFs… you can buy property, crypto, even collectibles,” says Tash. “I’ve heard of people putting NFTs or Pokémon cards in there as well.”
With this level of flexibility, some investors see SMSFs as an opportunity to tailor their investments exactly to their personal strategy, values, or even passions – within limits, of course.
Ana adds that there are potential tax benefits too, which can apply to the standard concessional rate of 15% on investment earnings and 10% capital gains tax for assets held more than a year.
“There’s the potential to minimise tax through strategies like franking credits or income splitting,” she adds.
Another benefit? Pooling resources. With up to six members, families can combine super balances to invest in larger assets like property .
But is it really worth it?
The short answer? It depends.
“The general rule of thumb is that it probably isn’t worth it money-wise unless you’ve got over $200,000 in super,” says Tash.
“Some people suggest you could do it for as low as $100,000, but generally when you consider the admin fees, the compliance fees… you need to have a pretty solid super balance for this to be worth it.”
And it’s not just about money – it’s about time. Running an SMSF takes effort.
“The time commitment for managing a self-managed super fund is an average of 100 hours per year,” Tash explains. That’s more than two full-time working weeks every year.
You’re also on the hook legally. Trustees are responsible for making sure the fund stays compliant with all superannuation laws, which can be complex and change over time.
“Are you comfortable taking full responsibility for compliance and investment decisions?” Ana asks. “Compliance is a whole other ballgame.”
The costs can really stack up
Set-up fees for an SMSF typically range from $2,000 to $5,000. After that, there are ongoing costs, like accounting fees, annual audits, ATO fees, and more. According to Ana, “As of the 2021–22 financial year, the median total cost to run an SMSF was over $9,000.”
There are also risks. Unlike regular super funds , SMSFs don’t have a compensation scheme if your investments fail. If you fall for a scam or one of your investment choices goes bust, you’re on your own.
“You can lose all of your money,” warns Tash.
Who might benefit from an SMSF?
Despite the costs and complexities, there are people for whom SMSFs might make sense. High net worth individuals may benefit from lower percentage-based fees. Business owners may benefit from the ability to buy commercial property through the fund and lease it back.
Estate planning is another consideration. “You have more flexibility with passing wealth to the beneficiaries,” says Ana. You can set binding death benefit nominations and structure the fund in line with your broader wealth transfer goals.
Ultimately, Ana sums it up well: “If you really have a specific strategy and you know why you want to do it, that’s when it might be worth it," she says.
How do you set one up?
If you’re still keen, here are the basic steps:
- Choose your trustees – individual or corporate structure
- Set up a trust deed – get legal advice to do this properly
- Register the SMSF with the ATO – obtain an ABN and TFN
- Open a bank account – to manage contributions and investments
- Create an investing strategy – tailored to your goals, risk tolerance and diversification
- Stay compliant – file annual returns, complete audits, and keep accurate records
But as both hosts point out, “This is a very simplified how-to. In reality, you need a chartered accountant, and you probably need to get financial advice."
What are the alternatives?
The appeal of SMSFs often comes down to control. But that doesn’t mean they’re the only way to take charge of your super.
Some super funds offer a new approach to managing your retirement savings, with the ability to choose your own investments within a diversified framework.
“There are other ways you can take control over your super,” says Ana. “You see more and more super funds offering this… where you can, for example, invest directly into ETFs .”
These kinds of platforms can provide a nice middle ground – offering investment choice without the heavy compliance burden or fees of an SMSF.
So… should you do it?
Probably not – unless you’ve done your research and know exactly why you want to.
Tash puts it bluntly: “My general conclusion on this is: if you’re not sure, don’t do it. Unless you really know why you want to do it, it’s probably not for you.”
Ana agrees. “It goes back to: what are your long-term goals? Why are you doing it? Do you know enough about it? Is it right for you?”
Even if you’re combining funds with a partner, you need to be cautious. “If it’s not driven by an adviser, I’d be very sceptical," Tash says.
Wrapping it all up
Just like debt recycling , negative gearing , or whatever hot financial trend is doing the rounds, SMSFs aren’t automatically a must-do. They can be powerful tools for the right person – but for most people, they might not be worth the hassle or cost.
Talk to a financial adviser , do your own research, and make sure your super strategy aligns with your goals, lifestyle, and risk tolerance.
If this episode sparked something in you, give it a five-star rating, drop a review, or better yet, share it with a friend. And if you're just starting out, the first ten episodes will get the financial gears turning. Follow us at @getrichslowclub and catch our personal updates at @tashinvest or @anakresina.
Happy investing!
