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For business owners and professionals considering a Self-Managed Super Fund (SMSF), it’s essential to understand the opportunities and responsibilities that come with managing your own retirement savings. 

Thorntons, a Western Australia-based accounting and advisory firm, has a reputation for providing expert guidance to businesses, professionals, and high-net-worth individuals navigating the complexities of SMSFs. Their dedicated superannuation specialists, including Lina Spadanuda, ensure that clients remain compliant while maximising the benefits of self-managed super. 

With over 30 years of experience in superannuation and accounting, Lina has developed deep expertise in SMSF compliance, investment strategy, and regulatory obligations. She has been with Thorntons for the past six years, helping clients set up, manage, and optimise their SMSFs while maintaining compliance with the Australian Taxation Office (ATO). 

Lina recently sat down with us to discuss what prospective SMSF trustees need to know before taking the leap into self-managed super. 

What is a Self-Managed Super Fund (SMSF)? 

An SMSF is a private super fund that you control as a trustee. Unlike retail and industry super funds, where investment decisions are managed by a fund provider, SMSFs give individuals direct control over their retirement investments. 

“You’re responsible for the decision-making,” Lina explains. “You must ensure the investments you choose align with your investment strategy and comply with the superannuation regulations set by the ATO.” 

While SMSF’s offer greater investment flexibility, they also come with strict compliance obligations. Trustees must ensure that the fund operates for the sole purpose of providing retirement benefits, and they cannot access funds before meeting legal conditions of release. 

Who is an SMSF Suitable For? 

Not everyone is suited to managing their own super. According to Lina, an SMSF may be suitable for the following people, subject to advice from a licenced financial advisor: 

✔ Business owners who want to own business premises within their super fund.
✔ High-net-worth individuals with a keen interest in investment strategy.
✔ Those wanting more control over their super investments, particularly if they have specialised investment preferences, such as property or niche asset classes.
✔ People comfortable with the compliance responsibilities that come with being a trustee. 

However, SMSFs may not be suitable for everyone. 

✖ Those with low superannuation balances may find that the costs of running an SMSF outweigh the benefits.
✖ Individuals who lack the time or expertise to manage compliance and investment decisions may be better off in a super fund managed by profit-for-member organisations or financial institutions. 

If you want a ‘set and forget’ approach, an industry or retail fund may be a more convenient option. 

Key Benefits of an SMSF 

✅ Control Over Investments – Unlike traditional funds, an SMSF allows you to invest in direct shares, property, private equity, and even alternative assets like silver or gold. 

✅ Tax Advantages – SMSFs benefit from the same concessional tax rates as other super funds, including a 15% tax rate on earnings and 0% tax in the pension phase. 

✅ Business Premises Ownership – “We have self-employed clients who purchase their business premises within their SMSF, allowing them to lease it back to their business,” Lina says. “That’s something you can’t do with a retail super fund.” 

✅ Estate Planning Flexibility – SMSFs allow for more tailored estate planning strategies, ensuring tax-efficient wealth transfer to beneficiaries. 

✅ Pooling of Super Balances – Couples and family members (up to six in total) can combine their superannuation balances into a single SMSF, creating greater investment opportunities and reducing administration costs per member. 

Common Mistakes and Pitfalls to Avoid 

Even the most experienced investors can make mistakes when managing an SMSF. Here are some of the most common pitfalls: 

Misunderstanding Compliance Obligations – “Some people think having an SMSF means they can access their super whenever they want, but that’s not the case,” Lina warns. Strict withdrawal rules apply, and breaches can result in serious tax penalties. 

Failing to Maintain a Bank Balance – SMSFs must always have cash reserves. “A common mistake is running out of liquidity, which can cause compliance issues,” says Lina. 

Accidental Personal Payments – “We’ve seen cases where clients have mistakenly paid personal income tax from their SMSF account instead of their personal bank account,” Lina explains. These errors must be corrected immediately to avoid compliance breaches. 

Not Having an Exit Strategy – Many trustees don’t plan for how they will wind up their SMSF when they retire. Having an exit plan in place ensures a smooth transition when the time comes to close the fund. 

How SMSFs Differ from Retail and Industry Super Funds 

Feature	SMSF	Retail/Industry Super Funds
Who controls investments?	Trustee (you)	Fund managers
Investment options	Broad – property, shares, alternative assets	Limited to fund’s pre-set options
Compliance responsibility	Trustee (you)	Managed by the fund
Ability to own business premises	✅ Yes	❌ No
Estate planning flexibility	✅ High	❌ Limited

 

“An SMSF is not for everyone, but for the right people, it offers significant benefits in control, investment flexibility, and strategic tax planning,” says Lina. 

Regulatory Obligations & Compliance 

While SMSFs offer control, they also come with strict compliance requirements. The ATO is the primary regulatory body, ensuring that SMSFs follow superannuation laws. If an SMSF has a corporate trustee, it must also comply with ASIC regulations. 

Lina emphasises the importance of staying up to date with legislative changes, as regulations can shift. “We attend annual training sessions, industry seminars, and stay informed through professional networks to ensure our clients remain compliant.” 

5 Key Considerations Before Setting Up an SMSF 

1. Seek Financial Advice – Before establishing an SMSF, consult a licensed financial advisor to determine if it’s the right choice for you. 

1. Decide on Individual or Corporate Trustee – A corporate trustee offers greater flexibility and simplifies succession planning, while an individual trustee structure may minimise forms to be completed and ongoing reporting obligations to ASIC. 

1. Have an Exit Strategy – Managing an SMSF can become complex with age. Plan how you will wind up the fund when needed. 

1. Understand the Costs – Running an SMSF involves ongoing accounting, compliance, and audit fees. Ensure the benefits outweigh the costs. 

1. Be Prepared to Stay Compliant – SMSFs require active management and regulatory compliance. Failing to meet obligations can result in severe penalties from the ATO. 

 

Thinking About an SMSF? Speak to the Experts at Thorntons 

If you’re considering an SMSF or need guidance on managing your existing fund, Thorntons can help. 

📞 Contact Thorntons today to speak with one of their SMSF specialists and ensure you’re making the right decision for your financial future. 

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