Ten Questions to Ask About Setting Up an SMSF (Essay Sample)

Questions to ask before setting up an smsf mat
SETTING UP AN SMSF: 10 QUESTIONS TO ASK
Despite the clear benefits of SMSFs, advisers need to satisfy themselves that establishing an SMSF is actually in their client’s best interests. Bryan Ashenden shows how to do it.
By Bryan Ashenden, senior technical manager of practice management, BT Financial Group
Self-managed super funds (SMSFs) continue to be the fastest growing area of the superannuation industry. They have shown remarkable resilience, both in the face of what feels like a constantly changing legislative and regulatory environment as well as through the global financial crisis.
With an increasing appetite, many firms – from service providers to large institutions – have either made the SMSF market their sole specialisation or identified it as a key target for future business growth.
But why are so many clients eager to enter this segment of the superannuation market? With the introduction of the “best interests duty” under the Future of Financial Advice reforms, it is important for advisers to the SMSF market to ask the right questions of prospective SMSF trustees/members to ensure setting up a fund is the right thing for them to do.
These are the key questions they should ask:
1. Why are you looking to establish an SMSF?Historically, many prospective SMSF members have used the terms ‘control’ and ‘choice’ as their reasons to establish a SMSF. But it’s important for them to be aware that the ability to choose underlying investments – often thought of by some as giving control – is a feature that is today available in a number of public offer or retail fund environments.