When Should You Set Up a Self-Managed Super Fund (SMSF)?

If you have been researching superannuation, you have probably come across the idea of a self-managed super fund (SMSF). The promise of more control and more investment choice can sound appealing — but an SMSF is not the right fit for everyone.

This guide breaks down what an SMSF is, when it can make sense, and the key signs it might be better to stay in an industry or retail fund.

What Is an SMSF?

An SMSF is a private super fund that you manage yourself. Instead of your super being managed by a large fund, the members of the SMSF take on the role of trustee (or director of a corporate trustee).

That means you are responsible for the fund’s decisions and for making sure it stays compliant with super and tax rules.

An SMSF can have up to six members, which is why many SMSFs are set up by couples or families who want to manage their super together

Why Do People Consider an SMSF?

There are plenty of valid reasons someone might look into an SMSF, such as:

• Wanting more control over investment decisions

• Wanting access to a broader range of investment options

• Wanting to combine super balances with a spouse or family members to invest as a group

• Wanting a structure that supports more tailored long-term planning (with the right professional advice)

Control can be a real benefit — but it only works if you are comfortable with the responsibility that comes with it.

When an SMSF Might Be Worth Considering

An SMSF tends to make the most sense when the “why” is clear and you are genuinely ready for the admin and compliance side of running a fund.

You might be ready for an SMSF if:

You want to be actively involved. SMSFs are not set-and-forget. You need to make ongoing decisions, document them properly, and keep on top of changes in rules.

You understand (and accept) trustee responsibility. Even if you use professionals (accountant, auditor, adviser), the legal responsibility stays with you as trustee.

You have the time and systems to stay organised. Running an SMSF includes record keeping, having an investment strategy, and arranging an annual audit and reporting.

It is likely to be cost-effective for your situation. SMSFs have set-up and running costs (accounting, audit, potential corporate trustee costs, etc.). An SMSF can be suitable at different balance levels depending on how much you outsource and what you are trying to achieve — but you should do the numbers properly before switching.

You have a clear plan for how the fund will work long term. That includes thinking about how decisions will be made, what happens if a member wants to leave, and what happens if life changes (relationship breakdown, illness, death).

When an SMSF Is Usually Not the Right Move

Just as important as knowing when an SMSF does make sense is knowing when it probably doesn’t.

An SMSF may not be right if:

You mainly want it for a “quick win.” If the main driver is chasing a hot investment trend or reacting to marketing claims, that is a red flag. ASIC and MoneySmart warn about high-pressure sales tactics and unrealistic return promises that encourage people to move super into risky investments.

You are short on time or not confident with compliance. SMSFs come with strict rules, and non-compliance can have serious consequences.

You are hoping to access super early. With very limited exceptions, accessing super before meeting a condition of release is illegal. Be especially cautious of anyone suggesting you can “unlock” your super by setting up an SMSF.

You want a solution that removes stress, not adds to it. If super admin feels overwhelming already, moving into an SMSF may increase the workload and pressure rather than reduce it.

A Simple Checklist: Questions to Ask Before You Set One Up

Before you take the next step, it helps to answer these questions honestly:

• Am I doing this for control and long-term strategy — not hype?

• Do I have the time (and discipline) to keep records and make ongoing decisions?

• Do I understand that responsibility stays with me, even with professional help?

• Have I considered what this means for insurance inside my current super fund?

• Do I have an “exit plan” if an SMSF no longer suits (or if circumstances change)?

If you cannot confidently answer these yet, that does not mean an SMSF is a “no” — it just means it is worth slowing down and getting proper advice before making changes

What’s Involved in Setting Up an SMSF?

If you decide an SMSF is right for you, it is important to set it up correctly from day one.

At a high level, setting up an SMSF usually includes:

• Choosing a trustee structure (individual trustees or a corporate trustee)

• Creating the trust and trust deed

• Registering the fund and putting the right accounts and reporting in place

• Preparing an investment strategy and ensuring decisions align with it

• Rolling over member balances (if you are moving from other funds)

The ATO outlines the formal steps involved in setting up an SMSF.

What Ongoing Work Does an SMSF Require?

This is the part many people underestimate.

Ongoing SMSF responsibilities commonly include:

• Keeping proper records and documentation

• Managing investments in line with the fund’s strategy

• Organising an independent annual audit

• Lodging an SMSF annual return each financial year

Even with professional support, trustees still need to stay engaged and accountable.

Should You Get Professional Help?

For most SMSF trustees, the best approach is building a support team — usually an accountant, an independent SMSF auditor, and (where appropriate) a licensed financial adviser.

A key point many people miss: different professionals have different scopes. For example, accountants can help with compliance and tax matters, but may be limited in the type of financial product advice they can provide.

Final Thoughts

An SMSF can be a powerful structure for the right person — but it is a big commitment. The best time to set one up is when you have a clear purpose, you understand the responsibilities, and you can see (on paper) that it makes sense for your goals.

If you are considering an SMSF and want to talk through whether it is actually the right fit — and what the setup and ongoing compliance would look like — Aris Accounting Group can help you understand the moving parts and get your foundations right.