What is an SMSF? Understanding Self-Managed Super Funds in Australia
- Editorial Team
- Jan 1, 2025
- 3 min read
Updated: Dec 26, 2025
Unlike retail or industry super funds, where investment decisions are made on behalf of members, an SMSF allows trustees to make their own decisions about how their superannuation money is invested, provided these decisions comply with Australian superannuation laws.
What is an SMSF
A Self-Managed Super Fund (SMSF) is a type of superannuation fund in Australia that gives members direct control over how their retirement savings are managed. Unlike retail or industry super funds, where investment decisions are made on behalf of members, an SMSF allows trustees to make their own decisions about how their superannuation money is invested, provided these decisions comply with Australian superannuation laws.
Understanding SMSFs
An SMSF is established with the sole purpose of providing retirement benefits to its members. To remain compliant, an SMSF must follow the rules set out by the Australian Taxation Office (ATO). Trustees are personally responsible for managing the fund, which includes ensuring contributions, investment decisions, and administration all comply with the law.
While many people are drawn to SMSFs because they offer greater flexibility and investment choice, it is important to recognise that operating an SMSF comes with significant responsibilities. Trustees are accountable for ensuring the fund remains compliant, and professional advice is often sought to manage complex areas such as accounting, taxation, and legal requirements.
What Can an SMSF Invest In?
SMSFs can generally invest in a wide range of assets including shares, managed funds, term deposits, and property. In some cases, SMSFs may also borrow to purchase certain types of property, but these arrangements are strictly regulated and must meet specific conditions. Because of the complexity of investment and borrowing rules, trustees often engage with licensed professionals such as accountants, financial advisers, or lawyers before making decisions.
How an SMSF Differs from Other Super Funds
The key difference between an SMSF and other superannuation funds lies in control and responsibility. In an industry or retail fund, members have limited say in how their money is invested. In contrast, SMSF trustees make the investment choices themselves. This greater control also brings greater accountability, as trustees are legally responsible for the fund’s management.
Seeking Professional Guidance
It is essential to understand that running an SMSF is not suitable for everyone. The ATO notes that an SMSF requires time, effort, and expertise to manage effectively. For this reason, many trustees work closely with accountants, lawyers, and financial planners to ensure the fund is compliant and appropriately managed. Mortgage brokers may assist with lending information where SMSFs explore property investment, but for matters relating to structure, contributions, or financial advice, trustees should consult the relevant licensed professionals.
Summary
An SMSF is a powerful structure for those who want more control over their retirement savings, but it comes with serious obligations. Before establishing or making decisions about an SMSF, it is critical to seek professional advice from licensed experts who can guide you on legal, accounting, and investment requirements.
UNDERSTAND THE SMSF JOURNEY
Every SMSF journey is unique. Connect with our team to explore SMSF considerations and understand how different professionals may fit into the process.
(GENERAL INFORMATION ONLY)
DISCLAIMER: This article is provided for general information and educational purposes only. It does not constitute financial, legal, tax, investment, or other professional advice and has been prepared without taking into account your personal objectives, financial situation, or needs. This article may include perspectives from industry contributors. Contributor participation does not imply endorsement, recommendation, or preferred referral status. While reasonable care has been taken in preparing this content, no representation or warranty is made as to its accuracy, completeness, or currency. SMSF Intelligence does not accept liability for any loss or damage arising from reliance on this information or any linked materials. SMSF Intelligence does not provide financial, legal, or tax advice. Before making any decisions, you should consider the appropriateness of the information in light of your circumstances and seek advice from a suitably qualified and licensed professional.
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