Before any investment, weigh up its pros and cons. Here they are for an SMSF, so you can decide for yourself.
Pros
Choice over investments
An SMSF can hold a wide range of investments, so you can spread the fund's money and adjust it as times change. No investment is free of risk, but a well-diversified fund can manage risk over the long term.
Concessional tax
A complying SMSF pays tax at concessional rates on its income. To keep those concessions, the fund must follow the rules, be audited every year and lodge its annual return with the ATO.
Retirement planning
An SMSF is a long-term investment for retirement, and members can plan their retirement income around it. A licensed financial adviser can help you plan it well.
Insurance
The fund can hold insurance for its members, such as life, disability and income protection cover. The right cover depends on each member's situation, so get advice.
Cons
Administration
An SMSF needs attention all year. The trustees must manage the fund, keep its records and have it audited every year.
A long-term commitment
Super is generally locked away until retirement. If you want quick returns, an SMSF isn't for you.
Knowledge and costs
You need financial knowledge to run an SMSF yourself. Without it, the cost of having others manage, prepare and audit the fund will be higher.
If you're a trustee, or thinking of becoming one, your accountant or financial planner can help you weigh these up.