Three things to Consider before Setting up a SMSF

When it comes to setting up a SMSF (Self Managed Superannuation Fund), one thing is certain — it’s not a decision to take lightly.

A SMSF can offer flexibility, control and tailored investment opportunities. But it also comes with responsibility, compliance obligations and additional costs. Before taking the leap, there are three critical questions every investor should ask.

Let’s unpack them.

1. Can Your Current Super Fund Already Offer What You Want?

One of the most common reasons people consider setting up a SMSF is control.

They want:

• Direct access to shares
• The ability to buy and sell investments themselves
• Greater flexibility over asset allocation
• Access to specific investments (like property or ETFs)

But here’s the key question:

Does your existing super fund already allow you to do this?

Many large retail and industry super funds now offer:

• Direct share investment options
• ETF access
• Term deposits
• Managed investment options
• Tailored asset allocations

In some cases, you can achieve a high level of flexibility without needing to go through the process of setting up a SMSF.

Before creating a new structure, it’s worth reviewing:

• The investment menu of your current fund
• The fee structure
• The performance history
• Whether you can create a more customised portfolio within it

Sometimes the solution isn’t setting up a SMSF — it’s simply switching investment options within your existing super fund.

2. Are You Prepared for the Time and Responsibility?

When you’re setting up a SMSF, you’re not just opening an account — you’re becoming a trustee.

And that role carries legal and administrative responsibilities.

As a trustee of a SMSF, you are responsible for:

• Ensuring compliance with superannuation laws
• Developing and maintaining an investment strategy
• Keeping detailed records
• Arranging annual independent audits
• Lodging annual SMSF tax returns
• Meeting reporting requirements

Even if you engage an accountant or SMSF administrator to assist, the ultimate responsibility still sits with you.

There is paperwork. There are deadlines. There are compliance rules. And penalties can apply if things are done incorrectly.

Ask yourself:

• Do I have the time to oversee this?
• Am I comfortable making investment decisions?
• Do I understand the regulatory environment?
• Am I prepared to stay informed as rules change?

Setting up a SMSF is often described as taking control of your super — and that’s true. But control also means accountability.

3. Are You Comfortable with the Costs?

Cost is often underestimated when people consider setting up a SMSF.

A SMSF typically involves:

• Establishment costs
• Ongoing administration fees
• Accounting fees
• Annual audit fees
• ASIC fees (if using a corporate trustee)
• Investment platform or brokerage costs

While SMSFs can become cost-effective at higher balance levels, they may be relatively expensive for smaller super balances.

This is particularly important because:

The primary objective of superannuation is to build retirement wealth efficiently.

If the additional flexibility of a SMSF comes at a higher cost — without delivering a clear strategic benefit — it may reduce long-term compounding.

When evaluating cost, consider:

• Total annual expenses
• Percentage of fund balance
• Comparison to your current super fund fees
• The value of flexibility versus the cost of flexibility

It’s not just about whether you can afford it — it’s whether it makes strategic sense.

Final Thoughts on Setting up a SMSF

If you’re seriously considering setting up a SMSF, the most important step isn’t the paperwork — it’s getting the right strategy in place first.

A Self Managed Super Fund can be a powerful structure when it’s aligned with your long-term retirement goals, tax position, risk profile and overall wealth plan. But it’s not a one-size-fits-all solution.

Before making any decisions, it’s worth having a structured conversation around:

• Whether a SMSF is appropriate for your situation
• The cost-benefit comparison against your existing super fund
• Your investment strategy inside super
• Risk management and compliance obligations
• How it integrates with your broader wealth plan

Our Financial Planning Team works with clients every day who are weighing up whether setting up a SMSF makes sense for them. We take a holistic view — not just focusing on the structure, but on how it supports your lifestyle and retirement goals.

If you’d like clarity around whether a SMSF is the right move for you, you can learn more about our Financial Planning services here: https://empowerwealth.com.au/services/financial-planning/

Because when it comes to superannuation, the right structure should support your long-term strategy — not complicate it.