SMSF are the Ferraris of the superannuation world and are the fastest growing area of superannuation funds in Australia. The market share of a SMSF is approximately 29% which is in excess of $578 billion^.
SMSF are becoming more popular due to the freedom they provide including the ability to borrow money, buy art work and invest in direct property.
The key benefits can be:
- Greater control – you decide where your money goes and at what point in time.
- Greater investment choice – for example direct property.
- Economies of scale – for example the bigger your SMSF fund the lower fees.
- Can have up to four members – for example husband and wife.
- Leverage – can borrow money to invest.
The negatives can be:
- Higher fees.
- Increased compliance burden.
- Potentially more time and effort required.
^ASFA – The Voice of Super – Superannuation Statistics December 2015