Want More Control Over Your Super? Discover How to Set Up Your SMSF Now

Why Does an SMSF Give You More Control?

Running an SMSF gives you greater involvement in investment decisions and how your retirement savings are managed. Unlike many retail super funds and industry funds, an SMSF can give members more control over investment options, provided each investment complies with superannuation rules and the fund’s investment strategy.

That flexibility comes with responsibility because SMSF trustees are responsible for running the fund and meeting its legal obligations. According to the Australian Taxation Office’s 2025 SMSF statistics, there were 646,168 SMSFs with 1,197,293 members and estimated assets of $1.01 trillion as at March 2025.

Key benefits and responsibilities include:

• Greater investment choice: SMSF investments may include listed shares, term deposits, managed funds and certain property, depending on the fund’s investment strategy and the superannuation rules.

• Greater transparency: Trustees can monitor the SMSF account, transactions, expenses and investment performance.

• Pooling super savings: Members of an SMSF can combine their super balances while maintaining individual member records, which may support investment options that require a larger pool of funds.

• Direct investment decisions: Trustees decide how the fund invests, rather than relying entirely on the investment menu of an APRA-regulated fund.

• Trustee responsibility: Members who are trustees remain responsible for SMSF compliance even when accountants, administrators or financial advisers provide support.

According to the ATO’s 2025 statistical overview, listed shares represented 26% of estimated SMSF assets, while cash and term deposits represented 16%.

Real Example: ASIC’s SMSF advice case studies describe Lauren and Chen-Xi, who had a combined super balance of $172,000, investment experience, surplus cash flow and an interest in managing their finances. Their circumstances showed why the starting balance of an SMSF is only one factor when considering whether an SMSF may be suitable.

Steps to Set Up Your Own Fund

Setting up a Self-Managed Superannuation Fund involves several steps under Australian super and tax rules. The Australian Taxation Office (ATO) regulates SMSFs, so completing the setup correctly is important for ongoing SMSF compliance.

Your trustee structure, trust deed, registration, bank account and investment strategy all need to work together. The right setup will depend on the members, their retirement goals, investment plans and whether they have the time and SMSF knowledge required to manage the fund.

The main steps are:

1. Choose your trustee structure. Decide whether the SMSF will use individual trustees or a corporate trustee. A corporate trustee can make changes in membership and asset ownership administration simpler, but it has additional setup and ongoing requirements.

2. Prepare the trust deed. The deed sets out how the fund operates, including trustee powers and how member benefits are dealt with.

3. Register the fund. Apply for an Australian Business Number (ABN), Tax File Number (TFN) and elect for the SMSF to be regulated by the ATO.

4. Open an SMSF bank account. Fund money must be kept separate from personal and business finances.

5. Prepare the investment strategy. The strategy should reflect the fund’s circumstances, retirement goals, investment risks, liquidity and member insurance needs.

6. Arrange professional support where required. Accounting, SMSF audit, administration and financial advice may form part of the fund’s ongoing costs.

You can review the ATO guidance on setting up an SMSF for current requirements.

Running an SMSF Day to Day

Managing an SMSF is not a set-and-forget arrangement. Trustees need to keep accurate records, follow the fund’s investment strategy, arrange an annual independent SMSF audit and lodge the required SMSF annual return.

The fund’s investment strategy also needs regular attention. The ATO states that trustees should review their investment strategy at least annually and document the review, particularly when circumstances change, such as when a member joins or leaves the fund or starts receiving a pension.

Important ongoing responsibilities include:

• keeping accurate accounting and trustee records

• making investment decisions that follow the fund’s investment strategy

• keeping SMSF assets separate from personal assets

• arranging an independent auditor each year

• lodging the SMSF annual return when required

• reviewing insurance needs for SMSF members

• monitoring cash flow and liquidity

• responding to any contravention or compliance issue promptly

“People often set up an SMSF because they think it will give them more control over their retirement savings, but they aren’t suitable for everyone,” said Alan Kirkland, Commissioner at the Australian Securities and Investments Commission (ASIC) in 2025.

Trustees can find further information through the ATO SMSF investment strategy guidance.

What Are the Costs and Risks of Managing an SMSF?

The costs and risks of managing an SMSF vary depending on the fund, its investments and the amount of professional support required. The starting balance of an SMSF is relevant, but ASIC no longer treats a particular minimum balance as the deciding factor because suitability depends on a person’s wider circumstances.

Common costs include accounting, administration, the annual SMSF audit, the ATO supervisory levy, insurance and financial advice where required. ASIC says advisers should consider the costs throughout the SMSF lifecycle, as well as the trustee’s time, investment approach, liquidity, diversification and ability to meet their responsibilities.

Before setting up or continuing an SMSF, consider:

• Time: Are you prepared to dedicate enough time to managing your own super fund?

• Knowledge: Do you understand your trustee responsibilities, or can you access appropriate professional support?

• Investment choice: Do the investment options you want justify managing an SMSF?

• Costs: How do the setup and ongoing costs compare with your existing APRA-regulated fund?

• Insurance: Will moving your super affect insurance held through your existing fund?

• Liquidity: Will the fund have enough cash to pay expenses, tax, insurance and member benefits?

• Compliance: Can you maintain records and meet the fund’s audit and lodgement obligations?

• Exit planning: Do you understand what may be involved if members later need to wind up their SMSF?

According to ASIC’s 2025 review of 100 SMSF establishment advice files, 62 files did not demonstrate compliance with the best interests duty, while 27 raised significant concerns about possible client detriment. This reinforces the importance of obtaining appropriate personal advice before making major decisions about your super.

Real Example: ASIC also considered James and Otto, who had a combined super balance of $512,000. Although they had the ability to understand SMSF trustee responsibilities, their goal was a simpler retirement with less administration, so ASIC’s case study showed that a higher balance alone does not make an SMSF suitable.

Understanding Financial Advice and SMSF Protections

Personal advice about whether to establish an SMSF or which financial products to invest in should come from someone authorised to provide that financial advice. A licensed financial adviser can consider your retirement goals, financial position, investment experience and existing super arrangements before recommending whether an SMSF is appropriate.

SMSFs also have different protections from APRA-regulated funds. Moneysmart explains that complaints cannot generally be made to the Australian Financial Complaints Authority (AFCA) against an SMSF itself, although SMSF trustees may be able to lodge complaints about financial advice or services provided by third-party financial firms.

Before receiving personal advice, consider checking:

• whether the adviser holds the appropriate Australian Financial Services licence or authorisation

• what financial advice or services they provide

• how they are paid

• whether they have experience with self-managed super

• whether any recommended investment fits the SMSF’s investment strategy

• what protections you may lose when leaving an APRA-regulated fund

You can also read Moneysmart’s guidance on Self-Managed Superannuation Funds before deciding whether an SMSF suits your circumstances.

How ACT Tax Group Can Help With Setting Up and Managing an SMSF

Setting up and managing a Self Managed Super Fund involves accounting, tax, record keeping, annual reporting and ongoing compliance obligations. Our team can help you understand the accounting and tax requirements, establish clear processes for your SMSF account, prepare records for the SMSF audit and stay on top of ATO lodgement requirements.

If you are considering setting up an SMSF or need support managing an existing fund, book a consultation with our team to discuss your accounting, tax and compliance needs. Where personal financial product advice is required, we can also help you understand when you may need to speak with an appropriately licensed financial adviser. 

Conclusion

A well-managed Self-Managed Super Fund can provide greater control over super savings, investment choice and how your retirement strategy is managed. However, running an SMSF also means taking responsibility for its investment strategy, accounting records, annual audit, tax obligations and ongoing compliance.

Before you set up an SMSF, compare the risks and benefits with your existing APRA-regulated fund, consider the ongoing costs and make sure the structure supports your retirement goals. Professional accounting, tax and financial advice can help you understand the responsibilities involved and make an informed decision based on your circumstances.