SMSFs a misnomer: HLB Mann Judd Sydney

Tyndall appoints national key account manager
March 22, 2011
EQT appoints new head of wealth management business
March 23, 2011

Self-managed superannuation funds (SMFSs) are misnamed and a better title would simply be “Personal Super Fund”, according to Mr Michael Hutton, head of wealth management at HLB Mann Judd Sydney.

Self-managed superannuation funds (SMFSs) are misnamed and a better title would simply be “Personal Super Fund”, according to Mr Michael Hutton, head of wealth management at HLB Mann Judd Sydney.

“Many people are attracted to the benefits offered by SMSFs – such as flexibility, control, transparency and cost-efficiency – but are worried about the responsibility and amount of work involved,” Mr Hutton said.

“The title SMSF, and the frequently used alternative name DIY Super, suggests that those who have such a fund must do all the investment, structuring and ongoing management work themselves, when the reality is that this is not the case.

“Trustees must take ultimate responsibility for the correct operation of the fund, and they need to direct (or at least understand) the investment decisions being taken according to an agreed investment strategy that suits all members’ needs. However, the portfolio management and overall administration can be done by somebody else.

“There is a wide range of advisers who can to help people make the most of their SMSF, providing advice on contribution strategies; superannuation pensions; and estate planning options. Advisers can also help with investment advice, implementing transactions, and ensuring the legislative and administration requirements are met, as well as organising most of the ongoing management activities such as preparing accounts and tax returns, undertaking audits and doing the banking.

“People with sufficient retirement savings shouldn’t allow concerns about the administration and regulatory requirements to over-ride all other considerations and prevent them from setting up a SMSF.

“The true benefits and advantages of SMSFs is that each one is set up to reflect the personal position and wishes of the trustees who have complete control over the portfolio and assets that make up their retirement savings.

“The tax and retirement planning strategies put in place can be very specific to needs of those members.

“As such, Personal Super Fund is a much better description.”

Mr Hutton said that such funds are increasingly recognised as the ideal investment vehicle for high net worth – and even medium-high net worth – individuals.

“The benefits of having a Personal Super Fund are significant from a control and flexibility point of view and being able to adapt the approach according to changing circumstances.

“Anyone with a sizeable retirement asset base should have some idea of how investments work and what is best for them, no matter what type of superannuation fund they have their retirement savings in.

“They should also be aware of how to obtain the greatest benefit from concessions available regarding contributions, pensions and so forth. Having a Personal Super Fund means they are more likely to be interested in, and engaged with, their super, and will therefore maximise the benefits.

“If they don’t want to do all the work themselves, they can use the services of an adviser or other professional to help with the actual management but still get all the benefits of control and flexibility over the investment philosophy, strategies employed and overall approach.

“Within a Personal Super Fund approach, strategies can be changed as quickly and efficiently as circumstances dictate,” Mr Hutton said.

HLB Mann Judd Sydney is a firm of accountants and business and financial advisers, and part of the HLB Mann Judd Australasian Association.

-oOo-

For more information please contact:
Michael Hutton – 02 9020 4194

22 March 2011