26 June 2012

Self managed superannuation funds (SMSFs) are something of a misnomer – they are really self controlled superannuation funds. That is to say most people set up their SMSF as a way to control their future superannuation decisions rather than to actually manage the funds themselves. A small proportion of retirees really have the interest, time and expertise to carry out all the management functions required for a SMSF. By law all owners of SMSFs are trustees of those funds and have a large number of responsibilities as a result. Adding the fund management function as well can be a bridge too far in many cases.

One solution is to hand over all investment decisions to professional fund managers. The experience of the last 10 years has shown this option to be quite disappointing. As pointed out in this article in today’s Australian, only 18 per cent of equity fund managers and 12 per cent of fixed interest fund managers in Australia have beaten index returns in the past 10 year period. For self funded retirees this is a sobering result. For those SMSF trustees who hand over the investment decisions to financial planners, the loss of income through fees can be significant. In many cases, SMSF trustees are paying planning fees, platform fees and fund management fees only to see their fund under-perform.

At Whites IFM we look to minimise fees paid out while focusing on the real function of a SMSF – that is to provide adequate income coupled with capital protection for the members of the fund. We eliminate fund manager and platform fees and the savings are kept with the superannuation fund where they belong. As the above article correctly points out – ” In investing you get (ie get to keep) what you don’t pay for.”

For more information on Whites IFM SMSF services, contact us by phone, email or using the Enquiries section on our Home page.