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If you’re considering setting up a self-managed super fund (SMSF) in the coming years, it’s important to have a clear understanding of what’s involved. In this article, we’ll take a closer look at the essential considerations you’ll need to keep in mind to ensure a successful SMSF set up in 2023.

Understanding SMSF Basics

Before we dive into the specifics of setting up an SMSF, let’s start by covering some basics. So, what exactly is an SMSF?

An SMSF is a type of super fund that allows you to take more control over your retirement savings. Unlike traditional super funds, where your money is pooled together with other members’ money and managed by professional fund managers, an SMSF gives you (and your fellow trustees, if you have them) the power to make investment decisions on behalf of the fund.

But why would you want to take on the responsibility of managing your own super fund? What are the benefits of setting up an SMSF?

What is a Self Managed Super Fund?

As the name suggests, an SMSF is a superannuation fund that is managed by its members. Generally, SMSFs can have up to four members, all of whom are responsible for the management and administration of the fund.

One of the key advantages of an SMSF is the ability to take greater control over your investments. With an SMSF, you have the power to choose which assets your fund invests in, giving you more flexibility and potentially higher returns. This is in contrast to traditional super funds, where your money is typically invested in a pre-determined portfolio managed by professional fund managers.

Benefits of Setting Up an SMSF

There are many potential benefits to setting up an SMSF, including:

  • Greater control over your investments
  • More flexibility with investment options
  • Potentially lower fees
  • Greater transparency and visibility into your retirement savings

Another advantage of an SMSF is the potential for lower fees. With traditional super funds, you may be charged a range of fees, including management fees, administration fees, and performance fees. With an SMSF, you have more control over the fees you pay, and may be able to reduce costs by managing the fund yourself.

However, it’s important to note that setting up and managing an SMSF can come with its own costs and administrative burdens. You’ll need to keep detailed records, complete regular audits, and ensure that your fund is compliant with all relevant regulations.

SMSF vs. Traditional Super Funds

So, why might you opt for an SMSF over a traditional super fund? One of the primary advantages is the greater control and flexibility that SMSFs offer. With an SMSF, you have the ability to invest in a wider range of asset classes, such as direct property or individual shares, that may not be available through traditional super funds.

Additionally, SMSFs offer more transparency and control over fees. With a traditional super fund, you may not know exactly what you’re paying in fees and how they’re being invested. With an SMSF, you have full visibility into the fees you’re paying and can make investment decisions accordingly.

However, it’s important to note that an SMSF may not be the best option for everyone. If you’re not experienced with managing your own investments, or if you don’t have the time or resources to manage your own fund, a traditional super fund may be a better choice.

Ultimately, the decision to set up an SMSF should be based on your individual financial goals and circumstances. It’s important to seek professional advice before making any decisions about your retirement savings.

Key Steps to Set Up an SMSF

Now that we’ve covered some basics about SMSFs, let’s take a closer look at the key steps involved in setting up an SMSF in 2023.

Establishing the SMSF Trust

The first step in setting up an SMSF is to establish the trust that will hold the fund’s assets. This involves creating the trust deed and appointing trustees. The trust deed needs to comply with all relevant legislation and outline the rules that will govern the fund.

When establishing the trust, it’s important to choose trustees who are capable of managing the fund’s assets and complying with the fund’s rules. The trustees must be over 18 years old and not have been convicted of any serious offences.

It’s also important to consider the structure of the trust and how it will be managed. Some SMSFs have individual trustees, while others have a corporate trustee. Each structure has its own advantages and disadvantages, so it’s important to seek professional advice to determine which structure is best for your SMSF.

Creating a Trust Deed

The trust deed is a legal document that specifies the rules and regulations of the SMSF. It sets out how the fund is to be managed, who the trustees are and how they are appointed, how contributions will be accepted and how benefits will be paid out when it comes time for the members to retire.

When creating the trust deed, it’s important to ensure that it complies with all relevant legislation, including the Superannuation Industry (Supervision) Act 1993 (SIS Act) and the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations). Failure to comply with these laws can result in penalties and other legal consequences.

It’s also important to ensure that the trust deed is tailored to the specific needs of your SMSF. This may involve seeking professional advice to ensure that the trust deed meets your SMSF’s objectives and complies with all relevant laws.

Registering Your SMSF with the ATO

Once the trust has been established and the trust deed has been created, you’ll need to register your SMSF with the Australian Taxation Office (ATO). This involves providing information about the fund, such as the fund’s name, ABN and trustee details, and nominating a fund auditor.

Registering your SMSF with the ATO is an important step in ensuring that your SMSF is compliant with all relevant laws and regulations. It also ensures that your SMSF is eligible for tax concessions and other benefits.

When registering your SMSF with the ATO, it’s important to ensure that all information provided is accurate and up-to-date. Failure to provide accurate information can result in penalties and other legal consequences.

Setting Up a Bank Account and Electronic Service Address

As part of the registration process, you’ll also need to establish a bank account for the fund and a unique electronic service address (ESA) that will allow you to receive electronic messages about the SMSF from the ATO.

Setting up a bank account for your SMSF is an important step in ensuring that the fund’s assets are properly managed and accounted for. It’s important to choose a bank that offers competitive fees and a range of services that meet the needs of your SMSF.

Establishing an electronic service address (ESA) is also important, as it allows you to receive important messages and notifications from the ATO about your SMSF. The ESA must be unique to your SMSF and cannot be shared with any other entity.

Overall, setting up an SMSF can be a complex process, but with the right guidance and advice, it can be a rewarding way to take control of your retirement savings and achieve your financial goals.

Developing an Investment Strategy

Once your SMSF has been set up and registered, it’s time to start thinking about your investment strategy. This involves setting goals for the fund and deciding on the types of investments that you’ll make to achieve those goals.

Before diving into the details of your investment strategy, it’s important to take a step back and consider your overall financial situation. This includes assessing your current income, expenses, and debts, as well as your long-term financial goals. Once you have a clear understanding of your financial situation, you can start to develop an investment strategy that aligns with your broader financial plan.

Identifying Your Investment Goals

The first step in developing an investment strategy is to identify your investment goals. These might include generating income in retirement, maximizing capital growth, or a mix of both. It’s important to be specific about your goals, as this will help you make more informed investment decisions.

For example, if your goal is to generate income in retirement, you might focus on investments that provide regular dividends or rental income. On the other hand, if your goal is to maximize capital growth, you might be more willing to take on higher levels of risk in pursuit of higher returns.

Diversifying Your Investment Portfolio

One of the most important elements of any effective investment strategy is diversification. This means investing in a range of different asset classes to reduce risk and maximize returns. Some of the most common asset classes that SMSFs invest in include shares, property, and fixed interest investments.

However, it’s important to remember that diversification doesn’t just mean investing in different types of assets. It also means diversifying within asset classes. For example, if you’re investing in shares, you might choose to invest in a mix of large-cap and small-cap stocks, or in companies across different industries.

Understanding SMSF Investment Restrictions

It’s important to keep in mind that there are some restrictions on the types of investments that SMSFs are allowed to make. For example, you can’t invest in assets that are acquired from related parties of the fund, and there are limits on the amount of money that can be invested in a single asset or asset class.

Additionally, SMSFs are prohibited from investing in assets that are considered to be collectibles or personal use assets. This includes things like artwork, jewelry, and vintage cars.

It’s important to be aware of these restrictions when developing your investment strategy, as they can have a significant impact on the types of investments that you’re able to make.

SMSF Compliance and Regulatory Requirements

Finally, it’s important to keep in mind the compliance and regulatory requirements that come along with setting up an SMSF. Failure to comply with these requirements can result in serious penalties and even the loss of your fund’s complying status.

Annual Reporting and Auditing

One of the key requirements for SMSFs is the annual reporting and auditing process. This involves preparing and submitting an annual tax return, an annual statement for each member, and having the fund audited by an approved auditor each year.

Taxation and SMSFs

SMSFs are subject to a range of taxation rules, and it’s important to have a good understanding of these rules to ensure compliance and minimize tax liabilities. For example, there are rules around the taxation of contributions, investment income, and capital gains.

Keeping Accurate Records

Finally, it’s important to keep accurate records of all transactions and activities related to your SMSF. This includes keeping track of contributions and withdrawals, documenting any investment decisions and transactions, and maintaining a clear and up-to-date audit trail.


Setting up an SMSF can be a great way to take control of your retirement savings and achieve your long-term financial goals. However, it’s important to keep in mind the many considerations and requirements that come along with managing your own super fund.

By following the key steps to set up your SMSF, developing a solid investment strategy, and staying on top of compliance and regulatory requirements, you can ensure a successful SMSF set up in 2023 and beyond.