quick 4 step guide to setting up a Self Managed Super Fund

Step 1: Is an SMSF Right For You?

The first and most important step is working out whether a self-managed super fund (SMSF) is the most appropriate vehicle for you. The benefit of a self-managed super fund is that you have more control over what you do with your retirement savings and it is more flexible in what you can invest in. The downside is with this control comes workload and responsibility in managing it, and the added cost of compliance as each SMSF needs to prepare financial statements and be audited each year.

Some important SMSF considerations:

How much money do you have in super or plan to have in the near future?

The more you have, the more appropriate it is from a cost perspective.

Also what do you plan to invest in?

If it is unlisted (i.e. not on a stock exchange) or physical (like direct property) then a SMSF will help you achieve these objectives.

Step 2: DIY or Get an Adviser?

OK so you have decided to establish a SMSF; the next question is are you doing this all yourself or going to get some help. This may depend on your level of knowledge about all things financial and legal and also the amount of time you have to commit to managing it.

Step 3: The Process of setting up an SMSF.

Once you’ve decided an SMSF is right for you and whether you’ll work with an adviser or DIY, you’ll need to organise the following paper work to set up your SMSF.

You will need a trust deed to establish your SMSF.This can be done online or with the help of a lawyer or your accountant.

When it comes to the trust, you must be the trustee and may need a shelf company to effect this.

You will need a cash account for the SMSF (the most common SMSF cash account in Australia is Macquarie Bank’s Cash Management Account).

You will need to register the SMSF with the ATO and get a Tax File Number and ABN (and potentially register it for GST).

Once you’ve set it up you’ll then need to talk to your existing super fund and organise for funds to be rolled over to the new SMSF cash account.

Allow 2-3 months for all this to occur. It is quite a process!

Step 4: Avoid Pitfalls!

There are a few common pitfalls to be aware of and avoid, particularly for the DIYers.

You can’t receive any kind of benefit personally from SMSF funds (except in very limited circumstances). Your SMSF it is there to accumulate and fund your retirement once you reach preservation age, not fund your present lifestyle.

For example you cannot buy a house with SMSF money and then live in it. Don’t forget to check what your personal (e.g. life) insurance needs are and what you had previously in old super before rolling it all into a new SMSF.

Also, don’t forget to think about your estate planning needs and whether you should nominate someone as the beneficiary of your super if you pass.

There’s a lot to think about, right? Which is why, more often than not, people get help when going down this path.

Rest assured though when used appropriately it can be a very effective and powerful vehicle to help fund your retirement. You can find more information at

If setting up an SMSF is something on your mind, feel free to reach out to me via our contact and bookings page. I’ll do my best to answer as many of your questions as I can via a quick phone call.

If you decide you’d like help going forward, we can organise to catch up and discuss your situation further.


About The Author: Dan Hewitt

Dan is our in-house SMSF expert. Dan helps a lot of people, from all walks of life, set up, manage and invest their SMSFs. Dan most enjoys the challenge of setting up an SMSF for small business owners whose aim is to create effective strategies around their business to help fund their retirement in the most effective way possible. To learn more about Dan visit his bio on our website or book a quick question with him on our contact page.