Once a decision is made to establish a self-managed super fund, intending members/trustees usually cannot wait until it is up and running.
The setting of an investment strategy for a new SMSF, the determining of a suitable asset allocation and the selection of investments for the fund provide valuable and exciting opportunities for new members. Typically when establishing an SMSF, would-be members will take a long, hard look at their current retirement savings, their goals and their personal circumstances, including their needs and tolerance to risk. And, of course, many new trustees setup an SMSF for specific reasons such as an aim to gain more control over their superannuation investments and/or to follow specific investment or estate-planning strategies. The latest superannuation statistics from APRA, released this month, show that the number of self-managed funds increased by 5,633 in the June quarter. And over the 12 months to June, the number of SMSFs rose by 33,546. With an average of about two members in each fund, this means that there were approximately 11,000 new individual trustees or trustee directors over the three-month period, and about 67,000 over the 12 months to March. (Under superannuation law, all members of an SMSF must be either individual trustees of a fund or trustee directors if a fund has a corporate trustee). A look back over the statistics for the past 12 months highlights the fact that the September quarter every year is the peak period for establishing new SMSFs. In the September quarter of 2012, 10,322 SMSFs were established - bringing in more 20,000 or so new individual trustees or trustee directors. More SMSFs are setup in the first few months of a new financial year because the annual fixed costs - the regulator's supervisory levy, various professional fees and administration charges - apply to the full 12 months ahead, not for just part of the year. As well, many people retire at the end of a financial year and establish an SMSF from the beginning of the next financial year.
By Robin Bowerman
Smart Investing
Principal & Head of Retail, Vanguard Investments Australia9
27th August 2013
2nd-October-2013 | 
