How to Establish a Self Managed Super Fund (SMSF)

The process of establishing an SMSF is often a stumbling block that makes it all too hard for people to go about this venture.  However, by following these steps from Future Assist Financial Services Group will help to make it as easy as possible for you to do.

Step one

Establishing the trustee. There are two types of trustees that a Self Managed Superannuation Fund can have, a corporate trustee or individual trustee. We recommend a corporate trustee as it provides an easy transition when members come and go from the Self Managed Superannuation Fund as well as the fact that makes it a lot easier in handling the affairs of the state of the Self Managed Superannuation Fund in the event of the death of a member.  A corporate trustee involves obtaining a company from ASRC; this step involves obtaining a company name which needs to be unique. The name of the superannuation fund however can be far more generic.  For an example, your Self Managed Superannuation Fund could be known as The Tucker Family Superannuation Fund.  However, your corporate trustee would be something like ANDL Propriety Limited, which is basically the letters of my kids’ first names.

Step two

Involves registering new superannuation fund with the Australian Taxation Office. The Self Managed Superannuation Fund will require an ABN number, a text phone number and may be required to register for GST depending on what you wanna do the fund.  To register these numbers with the ATO you need to fill out an application form which can be found online.

Step three

Commence rollover. The prospective Self Managed Superannuation Fund members will make contact with their current retail master fund plans and arrange for the rollover to be commenced. The retail master fund plan will forward a form to you, which you will need to complete and return to them.  These fund managers, the majority of these fund managers do not put this form online as naturally they don’t want to see the money going out of their funds and into someone else’s fund.  Hence the reason you need to contact them verbally.

Step four

Is setting up the bank account.  Within two to five days of ordering the company and ordering the superannuation fund deed, you will have a copy of the company constitution and also a copy of the fund deed. You will take this to your local bank and they will arrange for a bank account to be established for you. Step four establishing a bank account. Within two to five days of ordering the company and the superannuation find deed the documents will arrive to you.  You will take a copy of these documents and a copy of the company’s constitution and the Self Managed Superannuation Fund deed to the bank that you wish to use and they will set up the bank account for you. It is important for that this bank account is set up prior to the finalistion of the rollover as most retail fund managers would want to transfer your superannuation benefits via AFT.

Completing the rollover. Following completion of the bank account and the return of the forms to the retail master fund plan the money should then be rolled over into your account.  Note that on completing of the forms they need to be as accurate as possible. Retail fund managers love nothing better than to return the form to you advising that there has been an error in its application.

Step six

Is once the monies are in the bank account you're on your way to running your own Self Managed Superannuation Fund. 

Future Assist can help you with setting up your fund as it can be a complex and confusing process. Future Assist order the company, order the Superannuation Fund deed and we will register with the ATO all relevant numbers.

So come and speak to a Specialist Adviser about whether or not it would be suitable for you in setting up your own Self Managed Superannuation Fund.

Remember SMSF's are not for everyone and it is important to see if you can benefit from taking control of your superannuation.

Call us today: 1300 118 618 

or visit: www.futureassist.com.au/setupansmsf

What restrictions are there on investing in property within an SMSF?

Particularly with residential properties where we’re borrowing to invest in self-managed superannuation there are very stringent restrictions in place, some of the usual investment restrictions applied that we would talk about when we talk about investment strategy, things like operating an arm’s length, using all commercial terms and not having in house assets and things like that, but I guess to explain that more clearly what we’re looking for with residential property is not purchasing that property from a member or a related party of a member, so any one associated with that member is removed from the picture, we can’t acquire a property from him nor can we lease the property back to him even for a week or year, so we could for example buy a holiday house with their superannuation money and expect that a family member or relative can stay could stay in that property at any point in time, so with residential property we’re quietly limited in terms of the use, we can buy at arm’s length and we can lease it out at commercial rates to unknown parties or commercial basis in that time. 

When it comes to commercial property investment or business property it’s not as restricted, so we still have to operate on arms length terms, make sure all the rates and rent and all of those kinds of things are at commercial rates and we have proper leases in place and things like that but we can acquire that kind of property from a member of the fund or a relative of the member, so we could move for example a business property like a factory into a superannuation fund using borrowings to acquire that business property, that factory, I mean the business and that factory would pay rent to the self managed superannuation fund as the owner of the fund on arms length terms, so we can have the later parties in that instance but you can’t do that with residential property.

The other restriction is that we can’t develop property when its subject to borrowings within superannuation, so if we are looking to acquire a unit or something like that and do it up putting a new kitchen or bathroom, we can’t do that within the superannuation environment, it’s something that we need to look at outside of superannuation, so within the super environment you can acquire a property, you can certainly do repairs and maintenance but we must be very careful not to bridge the rules and step out of the line and turn that repair or maintenance into a big improvement that really changes the nature of that property, so development is pretty much out until you’ve paid off a property, once a property is paid off you can do what you like, so you could develop that and make substantial gains in that way. In addition, because of that limitation on developing property you couldn’t  for example buy a piece of land and then later on build a house on it or a factory or something like that, again that’s property development and it’s just not permitted within the superannuation environment when we are borrowing to invest.

There is no substitute for getting professional advice and second opinions when it comes to big financial decisions. As with all investment types and prior to making any investment decisions, your should consult a professional and licensed financial planner for advice on whether a SMSF and direct property investment is suited to your circumstances.

Future Assist Financial Services Group is an established, experienced and licensed financial planning firm assisting many Australians with their financial and retirement planning.

Talk to Future Assist today to see whether SMSF and direct property investment is suitable for you.

We can arrange your FREE self-managed superannuation setup and investment planning consultation:

-        Via Skype  (anywhere in Australia)

-        In our Offices (Brisbane, Sydney, Melbourne, Southport)

-        We can come out to see you in the convenience of your home or office.

 The team at Future Assist specialise in self-managed super, assisting you to regain control and make your super work well for you. Our experts are adept with the latest industry movements and trends, providing you with advice on how to manage your funds effectively.

IMPORTANT: The information above is general in nature and has not taken into consideration your personal goals, financial situation or circumstances. We recommend that prior to making any decision regarding your financial circumstances, investments, superannuation, SMSF or direct property investment, you should consult your licensed financial planner or adviser.

Future Assist Financial Services Group Pty Ltd ABN 24 151 337 843

Australian Financial Services License No. 413674

Future Assist Investment Strategy

A self-managed superannuation fund investment strategy is, depending on how look at it either a meaningless piece of box ticking or one of the most important steps in ensuring that your self managed superfund produces the best return on your capital possible. Deciding which you want it to be through on SMSF investment strategy is an important step in the process of setting up your fund and one you should give real thought to.

When determining which investments will be suitable for your retirement goals, it is important to enlist the services of a licensed SMSF professional who has experience with retirement planning. Future Assist are experts in helping Australians determine the right investment strategy to suit their retirement goals.

You know, following your instincts, picking out great options for a good return and all the other things you imagine yourself doing when you first decided to take control of your financial future..

Agood SMSF investment strategy is not just about fulfilling the legal requirements. It is about putting a plan in place that you can stick to and can help you navigate the complex investment fields you may be looking into.

Instead, look at your SMSF investment strategy as giving you a coherent shape to the balance of your portfolio allowing you to manage it in a way that meets your objectives and making it less likely that you will dive into bad investments. After all in what other work of life would you begin without a plan in place? If you were starting a business you would have done thorough market and competitor research, established the viability of the business and known and advanced on almost everything that was likely to happen on the first year or two for everything from battles to the likely pass of our lives.

Having an overall strategy is vital. 

Trying to work without one is like trying to navigate by map without having decided on a destination, you might enjoy the journey but you aren’t likely to end up anywhere useful. The same thing applies to your superannuation fund, you need to be clear from the start about exactly what you want out of it, what level of return do you want, what level of risk are you willing to expose yourself to, how long a term do you want your investments to be, and what areas do you plan on putting your money into. 

It is important to also plan around your level of risk tolerance. Some investments invariably have a higher risk associated with them. Depending on your stage of life and other internal and external factors, will determine the appropriate level of risk you should look at approaching your investments.

An effective investment strategy will also consider the administrative and compliance requirements of your investments and ensure your fund is fully compliant at all times and with all investments.

This is where a licensed professional can provide invaluable guidance that will help you ascertain which investment strategy will suit your goals.

If these sound like a basic considerations, that is because they are and yet if you don’t have a SMSF investment strategy it can be detrimental to your overall fund results. So make sure you have a SMSF investment strategy before you start to risk your money. Know what you want out of it and how you plan to get it, don’t just treat it as a boring chore that you are forced to complete. 

Treat it as an opportunity to give your portfolio a clear direction. In doing this you will quickly find that it has a far more coherent shape and will be an invaluable guide for choosing your investments for your SMSF.

Hopefully now you can see how important an effective investment strategy can be for your SMSF, and the importance of seeking professional licensed advice to help you administer your fund and ensure it is compliant.

Future Assist Financial Services Group specialise in self-managed superannuation (SMSF) administration, compliance and investment advice. 

Speak to a licensed adviser today on: 1300 118 618

SMSF TRUSTEE

Self-managed superannuation funds offer great benefits to those who have the ability or professional assistance to take advantage of these benefits. It is important to first note that setting up and running a SMSF is a major financial decision and making the wrong decisions can have lasting repercussions.

With this in mind, self-managed superfund operate in a very unique environment, they are tax-free environment. However they are not immune to going bankrupt, from going insolvent. If you’re self managed superfund, you are industry superfund, you are retail fund, they are all susceptible to going insolvent, now it’s unlikely they will because of the extremely conservative investment strategies that most people follow for example it’s very difficult to gear or borrow money in a self managed superfund and it’s very difficult to lend money to one of your members or to rather a party to the members. So why in this case, in this case the bank will go bankrupt as well and so can the insurance company, this is very true and fro the mouth of a 5 year old, you can go bankrupt and lose your money and that can happen for a superfund or self managed  superfund. However, what can one do if you are in a self managed superfund and you go bankrupt and you are in a self superfund, in that case you have to cease being the trustee or the director, now there are two ways to be part or run and operate a self managed superfund; either in your own individual name, so if you and your wife or you and your husband were in the self managed superfund under your own name, both of you would have to be the two trustees and both of you therefore will be the only two members, if you’ve opted to have a company or corporate trustee, a trustee that would therefore have the directors which are the members, so if you have three directors then you’ll have those three directors as the members and only those three people as the members, there is choice. However when people go bankrupt or you want to live overseas, there is a bit of a problem and without any changes to the law whatsoever the Australian Taxation Office for 6 months or  over, less than 12 months ago gave us a free kick, and said you are now able to do a special type of power of attorney which allows you, you are going to do it before you go bankrupt which will allow you have another person holding your attorney to look after your self managed superfund, to have central management control while you are out of seat, while you have unsound mind, while you are bankrupt, a huge opportunity you cannot let go, so if you are close to going insolvent then you may want to consider looking at doing these things. You will need to speak to a solicitor and get a kit on how to get one these special types of enduring powers of attorney. You cannot do it after you go insolvent because you can’t do that kind of attorney generally if you are insolvent, so think about the future, if you don’t do it then you’ll need to liquidate the position of the self managed superfund or give the fund to an APRA regulated fund, which first thing they will do is liquidate the position generally anyway. So self managed superfund’s are wonderful but you need to control them yourself and you can now thanks to the ATO, self managed superfund’s are wonderful but you have to keep the trustees pure and if you cannot do it yourself because you have unsound mind, going overseas for long periods of time or becoming insolvent or bankrupt then think about a special enduring power of attorney.

It is important to speak to a licensed financial adviser before making any financial decisions that could affect you and your family.  Future Assist are licensed to provide retirement planning advice. Speak to us today to arrange your free consultation regarding your financial planning requirements or to discuss whether or not a self-managed superfund would be appropriate for meeting your retirement goals..

Please consider the above as general information. It is not financial advice and has not been tailored to your personal financial position. Making decisions regarding your superannuation and retirement planning are major decisions that should not be taken lightly or without professional consultation.

Speak to a licensed financial planner today: Call us on 1300 118 618

About Future Assist Video

Watch to find out more about Future Assist!

www.futureassist.com.au

Super with Future Assist

Ok, so you're young and funky. And the idea of thinking about what you’ll be doing when you're 65 seems crazy. By the time that rolls around we might all be bowing down to a robot over-Lord or growing gills because global warming melted the ice caps. So why worry about it now. The word superannuation makes your eyes glaze over. And calling it super doesn’t make it much better. Super heroes maybe.  Super cool for sure. But superannuation... BlahBlahBlah.  

Still, can we at least agree on two things? Firstly money might not be everything but enough of it put a roof over your head. And something a bit better that instant noodles on the table. Secondly people are living longer and staying healthier. That means when you retire is a good chance that you’ll be fit and active.  And looking to do all the things that work was getting in the way of. Snowboarding, paragliding, releasing an album and working your way through the entire back catalogue of Sudoku.  And that’s what superannuation is really about. Planning for the party. Putting aside enough money so that when you retire you’ll be craving it up, not eating instant noodles. In fact this is so important that there is a range of legislation in place and legal requirements for employers to pay part of your earnings into your superannuation fund.  Nine percent in fact, and this figure is growing. It is recommended that you seek professional assistance when making large financial decisions, esspecially those that can have a big impact on your future. Future Assist are a licensed financial Advisory service that can help steer you in the right direction.

Why is this important? Because of the wonder of compound returns. Ok so with employee contributions of 9% and compound returns over your lifetime. Let’s say you have a superannuation nest egg of a few hundred thousand dollars. But before you go thinking that sounds nice. We need you to imagine a puffa fish cross with a piranha, because now we need to talk about inflation and this inflation has teeth, sharp little ones and chew away your money. Remember how your grandparents always going on about how that when they were young they had bought a car and a house for $10. And still had enough change left over to pick up the latest phonogram player. And you parents may still recall being able buy stuff with one and two cents pieces. No more as time marches on, prices increase. Or inflate. So your money is worth less and less. So you keep you out of range of the terrible Puffa piranha fish. It becomes even more important to make sure your superannuation savings end up more like a cash elephant than a cash cow. Because we all know that piranhas can strip a cow in under two minutes. 

There are three essential factors in aiming for the elephant.  One, start early. As you saw our example the longer your savings are earning returns the more gravy you get. Especially in the latter years. Two, make additional contributions, the more you add as you go the more you'll harness the power of compound interest. Not only that in some circumstances the government might even help you out with the co contribution. Three, maximize your returns. When it comes to maximizing your return, it depends on what risky you comfortable with. There is no need to just accept the default option if you are young, you have a long way to go to even that investment ups and downs. 
In most cases you have the choice of superannuation funds and also the kind of investment strategies that the superannuation fund will use with your money. You can also look into self-managed superannutaion (SMSF) . But higher rates of return are often more risky.  Investment returns depend on a whole range of factors including the global economy, interest-rate, exchange rate and market confidence. The rate of return on riskier investments on any given day can jump around radically.  And risk can be scary. Especially when you’re talking about money.

The above is provided as a general guide and should not be considered financial advice. Speak to a licensed financial adviser today about your situation, to see if your strategy lines up with your retirement goals and risk profile.