Is an SMSF worth it? What you take on as a trustee

The first question we are usually asked is about the balance. That matters, but the question before it is whether you want the job, because running an SMSF is one. Moneysmart's SMSF guidance puts it plainly: only consider an SMSF if you understand the role and are ready to stay involved.

What you take on as trustee

An SMSF can have up to six members, and generally each member must be a trustee, or a director of the company that acts as trustee. Every trustee is responsible for the fund's decisions, including decisions the other trustees made without them. Paying an accountant does not shift that.

Each new trustee, or director of a corporate trustee, must sign an ATO trustee declaration within 21 days. It records that you understand your duties under the Superannuation Industry (Supervision) Act 1993. The ATO's page on trustee obligations sets them out. Among them:

• The fund exists only to provide retirement benefits to members, or death benefits to their dependants. Buying a rental so a relative can live in it breaches this sole purpose test.
• An investment strategy that considers every member's circumstances, liquidity, diversification and whether to hold insurance. It is reviewed regularly, and your records have to show how each investment fits it.
• Generally no buying assets from members or related parties, no lending to them, and no borrowing, apart from limited exceptions.
• Assets valued at market value every year, financial statements prepared, an independent audit, then the annual return lodged and any tax paid.
• Certain changes, such as a new trustee, reported to the ATO within 28 days.
• The fund kept an Australian super fund all year, which includes its central management and control being ordinarily in Australia.

Moneysmart names two protections you give up. If an SMSF loses money through theft or fraud, the government compensation available to industry and retail fund members does not apply. And you cannot take a complaint about your own fund to the Australian Financial Complaints Authority.

What it costs, described rather than priced

There is no dollar figure for our work here, because it depends on what the fund holds and how much happens in it. Most of the costs arrive whether the fund has a good year or a bad one.

• Accounting and tax: the financial statements, member statements and the SMSF annual return. A fund with a property loan and a pension in payment is more work than one holding cash and shares.
• The audit, every year, by an approved SMSF auditor registered with ASIC. The ATO says to appoint the auditor at least 45 days before the annual return is due. The auditor also checks the fund's compliance with super law and reports contraventions to the ATO.
• The ATO supervisory levy. It is $259, and the amount paid with the 2026 annual return is the levy for 2026–27. A newly registered fund pays two years at once, $518, with its first return.
• ASIC fees, if the trustee is a company.
• Investment costs such as brokerage, platform or property costs, plus any financial, legal or tax advice, and actuarial fees in some cases.
• Insurance premiums, if the fund holds cover for members.

These are generally paid from the fund and are often deductible to it. Moneysmart's point about balance is one of proportion: the lower the starting balance, the bigger the bite fixed costs take out of returns. It also asks whether you expect to add to the fund soon, and whether an SMSF suits your goals, skills and time.

Our own fee for looking after an SMSF is fixed and agreed before work starts, and we quote it once we have seen the fund's investments and activity. How our fees work explains how the quote is built.

The time it takes

Moneysmart cites Investment Trends research from April 2021 that found trustees spend, on average, more than eight hours a month managing their fund. An accountant takes the accounts and the return off your hands. Someone still has to review investments, sign minutes, keep the strategy current and gather statements for the auditor.

If two of you are trustees and only one is interested, the other still carries the liability. Be honest about that before the fund exists.

Insurance inside the fund

If your current fund gives you death or disability cover, Moneysmart warns that moving to an SMSF may mean losing it. Before anything is rolled over, find out what cover you hold now and whether you could get it again at your age and state of health.

The investment strategy must consider whether to hold insurance for each member. The ATO's guide to creating an investment strategy lists the cover a fund can provide: death, terminal medical condition, and permanent or temporary incapacity. Trauma cover is generally out, because it fails the sole purpose test and matches no condition of release.

How much control you really get

Control is the reason we hear most often. You decide what the fund invests in, within the trust deed, the investment strategy and the law.

The limits are tighter than they look. No investment can give a member or related party a present-day benefit, so a holiday unit the family uses, or a loan to your own business, is generally off the table. And Moneysmart notes that many retail and industry funds already offer investment choice without the work of running a fund.

When it tends to make sense, and when it does not

Moneysmart lists the circumstances in which an SMSF may suit you: you have the time and ability to be actively involved, you understand and accept the trustee role, you are not planning to move overseas or you understand what that would mean, you want more control over investments, payments or fund management, you have looked at alternatives that give some of the same benefits, the fund supports your retirement goals, and the costs make sense for you.

Read that list backwards and you have the situations where it usually does not work. A modest balance with little coming in. One partner keen and the other indifferent. A member who might take a job overseas: the fund has to meet the residency conditions all year, and if it stops being an Australian super fund, the ATO taxes its income and assets at the highest marginal rate.

That residency point matters for anyone who moves between Australia and New Zealand. So does this one: under the trans-Tasman portability arrangement, the ATO says KiwiSaver savings can only be transferred to and held in a complying APRA-regulated fund, and cannot be transferred to an SMSF. See KiwiSaver and Australian super.

How to wind one up

Funds close for ordinary reasons: a death, a separation, balances drawn down, or trustees who no longer want the work. The ATO suggests every fund keep a written exit plan, signed by all trustees, well before it is needed. Its page on how to wind up an SMSF sets out the process, which runs roughly in this order.

Leave enough money in the fund to pay the final audit and accounting fees. Once the ATO processes the final return, it cancels the fund's ABN, and a wound-up fund cannot be reactivated. If a company was set up only to act as trustee, tell ASIC it needs to be deregistered. The records still have to be kept.

If you are weighing up an SMSF, or running one you are no longer sure about, get in touch and we can go through the levy, the audit and the reporting obligations as they apply to your fund.