What is the purpose of a Self Managed Super fund – SMSF
So what is the main purpose of a self managed super fund. The main reasons why individuals setup a fund are for control, flexibility and transparency over their super money. Before you can understand whether it is right for you, you need to first understand the mechanics of how it works and the benefits you might be able to receive out of your self-managed super fund.
The easiest way to explain how super fund works is to think of it terms of a retail fund because during some stage of our lives everyone one of us has had a retail superannuation fund. So let us imagine you are with AMP. AMP is called the trustee company, which means they give you a predetermined list of what you can and what you can’t invest in within your superannuation fund.
Now with your own fund you become the trustee so you are effectively replacing AMP. The only list that you are predetermined by is what legislation will allow you to do and not allow you to invest in. This then gives you the ultimate level of control, flexibility and transparency over your superannuation money.