However, a Self-Managed Super Fund requires some thoughts that requires serious consideration before you take the big step of taking control of your super.

1. Time

Time is the most important factor when you manage your own super fund. An SMSF trustee should devote an ample amount of time (thumb rule- 5 hrs. a week) to managing his investments. Each investment that you make in an SMSF requires careful consideration of the risk and return associated with it. Analysis of investment risk and return demands your time. Formulating an investment strategy can also be a time-consuming process. Replicating someone else’s strategy might not be ideal for you.

2. Required Funds

A self-managed super fund usually comes with many associated expenses some of which are:

• Preparing the SMSF annual return
• valuations of the SMSF’s assets
• actuarial certificates for SMSFs paying income streams (pensions)
• financial advice
• legal fees, for example if the trust deed needs to be amended
• assistance with fund administration
• insurance for members.

This means having enough amount of money in your fund Is very important to make investments that generate more return than your expenses.

There is an existent general consensus of a minimum balance of 200,000 in your super to start an SMSF. However, at OneStopSMSF now you can benefit from our state of art optimization of funds that results in low operating and management costs.

OneStopSMSF do not provide any kind of financial advice to our clients. However, we partner with industry leading financial planners for your financial planning needs.

3. Investment Experience

When you take charge of your super fund, it fundamentally gives you the freedom but also the responsibility of all the investment decisions you make in the super. It is highly recommended that you have prior experiences of investing in different assets to make the right choices and also in understanding the market to make investment decisions.

The above-mentioned pointers are some of the most important questions you should be asking yourself before you take that big step of taking control of your super.

• With OneStopSMSF in the picture taking control of your super is now an easy process. Your investment decisions are made easy with our industry leading financial advisors.
• You save a considerable amount of your administration charges which enables you to start funds with low balances.
• Our financial advisors provide ongoing financial advices to people with less or no investment experiences.

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Trustees of a fund should look at developing a strategy where there is enough diversity in the investment portfolio i.e. the money in a fund, invested into different kind of assets. Diversifying your portfolio across assets considerably reduces your exposure to risk. It is recommended to think of the SMSF investments as a part of your overall portfolio. For instance, if you have a heavy portfolio of property outside your SMSF then concentrating on other assets- Australian shares and CFDs, Term deposits etc. -within the SMSF investment would be a desirable action to take to reap benefits of diversification.

2. Liquidity

Liquidity of the investments is another important factor to be kept in mind while making investments. Your super fund should have its part of money invested into assets that can make it liquid enough to face situations like death of a member that requires immediate payments.

3. Risk

Every investment comes with a level of return in relation to the level of risk it exposes you to. Generally high-risk investments generate a high level of return. This might not be suitable for you if you are looking to invest short term. Deciding the extend of risk you can expose yourself to, depending on ‘when you expect the income to be generated (short term or long term)’ should play an important factor in setting your investment strategy.

4. Risk tolerance of members

Risk tolerance of members should be one of the factors that plays an important role while designing your strategy. Members with high risk tolerance should ideally look at investing long term, e.g.-investments in emerging markets. This may differ for members who wants to reap the benefits in short term. They should look at investments with less risk, e.g.- Australian treasury bonds, CFDs.

5. Age profile / Life cycle

Age profile of the members play an important role in the designing phase of your strategy. Members who are in the later stages of their lives approaching retirement, might want to invest in less aggressive assets like bonds. On the other hand, young members might prefer aggressive investments with high risk to reap the benefits.

Your investment strategy is a mix of many factors. Designing an ideal investment strategy can sometimes be a hectic task considering the many factors to be kept in mind. OneStopSMSF provides you access to premium financial planner who can help you design the strategy just right for you tailored to your needs.

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