ASIC has warned Australian investors considering establishing their own self-managed superannuation fund (SMSF) to be particularly aware of the potential downside to such a strategy, and that many Australians set up SMSFs that are inappropriate for their circumstances.
To reinforce these important considerations and to help members make more informed decisions, ASIC has released a factsheet, Self-managed superannuation funds: Are they for you? The factsheet prompts investors to consider the time and expertise required to run an SMSF, the costs of running an SMSF and the effect this may have on returns, especially for low balances. It includes risks associated with investing in direct property, the responsibility trustees have and consequences if assets are misused.
This factsheet is suitable for consumers and SMSF trustees deciding or reassessing if an SMSF is appropriate for them. It will also be a useful resource for financial advisers when providing personal advice on SMSFs.
The factsheet will be sent to all newly registered SMSF trustees as a pilot in November, when they register with and elect to be regulated by the ATO. ASIC will then survey a number of the SMSFs to assess its usefulness.
ASIC, 19-277MR ASIC urges consumers to question whether SMSFs are right for them, 11 October 2019
ASIC, Self-managed superannuation funds: Are they for you? 11 October 2019