Update- Self Managed Super Funds (SMSF) The SMSF is an interesting administration vehicle for superannuation because it gives a client the illusion of control while at the same time materially increasing the client’s exposure to liability. Essentially, a SMSF moves all responsibility from an unrelated third party trustee to the client which can and does have severe consequences such as in the case of the vengeful spouse. In fact, breaching the Superannuation (Industry Supervision) Regulations 1994 is as simple as not documenting investment decisions, not keeping adequate financial records of transactions, using funds to invest in a holiday house for trustees and or lending money to trustees. The direct responsibility for such breaches lies with the trustees which include each and every member in the SMSF and if found negligent, all the trustees will face personal fines of up to $220,000 and five years jail. That is why a Public Offer superannuation fund such as a master trust or wrap is most often the best and least expensive administration vehicle for superannuation UNLESS the strategy is to buy direct real property and or to buy the shares in an unlisted company where there are no related parties. Fortunately, our primary concern is for the capital invested to beat the respective benchmark after fees irrespective of whether the administration vehicle is a SMSF or a Public Offer superannuation fund. At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me via ‘Contact Us’ at www.newealth.com.au or to call me on +61 2 9267 2322.
29th-March-2012 | 
