SMSF Property & Direct Shares

At Croeso Financial Advice, we believe that Self-Managed Super Funds (SMSFs) are not suitable for everyone or every situation. We’ve seen many clients in SMSFs who don’t benefit from the structure, which adds unnecessary complexity and stress.

However, SMSFs can be a unique and powerful tool for the right client, with the right purpose and advice. They can offer more investment choices, reduce fees, and make retirement savings more practical for business owners. With proper guidance, SMSFs can add significant value to a client’s financial situation.

SMSF’s can allow clients to invest in:

  • Direct residential and commercial property.
  • Invest in direct equities and other speculative investments.
  • Invest in Artwork, Gold or other unlisted investments.
  • Create debt in the name of the SMSF, rather than their personal name, allowing them to keep the costs and liabilities away from their personal name/business.

Risks of SMSF Structures

While SMSFs can offer significant benefits, there are also notable risks:

  • Accountability: As an SMSF Trustee/Member, you are responsible for compliance, regardless of professional services employed. Understanding SMSF rules and working with the right professionals is crucial. Mistakes can lead to fines or loss of tax concessions, which can be very costly.
  • Fees: Many clients move to SMSFs to save on management fees, but this is only beneficial with a suitable balance of retirement savings. While you may avoid management fees on direct investments, you could incur broker fees, land taxes, estate agent fees, loan interest, valuation costs, and fees for your Accountant, Financial Planner, and Auditor.
  • Poor Investment Choices: Being in control of investment decisions doesn’t always yield positive results. Poor property investments or underperforming share portfolios can significantly reduce your overall portfolio. The goal is to ensure your superannuation grows each year to support your retirement goals. Sometimes, a simple, traditional superfund may be the best option.

It’s essential to carefully consider these risks and ensure your superannuation strategy aligns with your retirement goals.

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