The pros and cons of starting an SMSF

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Running your own super fund might sound like a ticket to independence, but it can come with heavy compliance and set-up costs.

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Many people set up an SMSF in the belief it’s the only option to take greater control over their savings for retirement. And for some people an SMSF may be the right investment vehicle. But SMSFs come with high set-up and ongoing costs and compliance requirements that can create a heavy administrative burden.

If you’re looking to invest directly in shares we offer a self-managed investment option called Direct Access that gives you the power to invest your super in a range of options, while remaining a member of TelstraSuper.

Control and freedom

Here’s a rundown of how an SMSF compares with Direct Access:

  1. Ability to invest directly in the Australian Stock Exchange: Yes. With Direct Access, you can invest directly in ASX 300 companies, term deposits, or select from our range of more than 30 Exchange Traded Funds (ETFs).
  2. Manage your own investments: Yes. With Direct Access, you can buy and sell investments in real-time, by accessing the online platform through SuperOnline on our web site. Plus with Direct Access, you can register and start building your portfolio within 24 hours.
  3. Cost: An SMSF requires significant outlays. This includes setup costs, management, brokerage, auditing, reporting and compliance. You may need a financial adviser to oversee investment strategy development. On a yearly basis, an SMSF can cost tens of thousands of dollars to maintain and operate. However, Direct Access does not have the same cost burdens – we cap the fee so you always know the most you will ever pay. For full details of fees, see the Direct Access Product Guide.
  4. Complexity: Yes. An SMSF often requires the services of an accountant to audit and ensure the fund is complying with relevant legislation. Trustees of an SMSF must engage directly with the Australian Tax Office, whereas members of a super fund like TelstraSuper do not need to deal with the relevant regulators. For more information, check out the SMSF Association site.

But don’t just take our word for it. The following quote comes from the web site of the Self-Managed Super Fund Association:

“A key driver of individuals switching to SMSFs is the wish to gain control over investments. Nevertheless, gaining control over your investments is a trade-off – you take on obligations to operate and manage your SMSF within the bounds of the law. This requires commitment, a significant amount of time and a hands-on approach. SMSFs are also complex -- even seasoned SMSF members require assistance from SMSF professionals.” *

*http://trustees.smsfassociation.com/topic/is-an-smsf-for-me/

How to register

For more information and to check the terms and conditions, read our Direct Access Product Guide.

To register for a Direct Access account, login to SuperOnline and select the 'Direct Access' link from the left-hand menu.

Start Investing

If you haven't yet provided a valid email address or your TFN to TelstraSuper, you can do so while registering for your Direct Access account. If you're not an existing SuperOnline user, first register for our secure member portal. Remember to have your member number and four-digit PIN handy.