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

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

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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.