From what I have read smsf's have easily out performed the professionals
Another SMFS Thread
- Thread starter zimby
- Start date
Yes. That's why a SMSF can provide an advantage.
You are incorrect that the investor can "go to cash" that easily. Some funds only allow a change once a week meaning you can miss the boat in a correction. Some are still stuck in illiquid mortgage funds because of it. Yes, The investor can choose a whole of fund strategy to the cash option by paying an exit fee from one strategy to the other. This is reflected in unit pricing spreads on top of their fees. Some fund prohibit a change of units more than "X" times a year or within 30 days etc.
A SMSF can amend and change strategy and portfolio without a single formality. Wake up and sell - Cash it all in. Done. Daily if they choose. Just sell / buy etc. Sure that doesn't mean they should undertake own management esp if they lack skills. But some do want this. . They may have no idea or take exceptional risk. Some are very competent and enjoy the involvement in "their money". I know many people who use a SMSF merely so they can continually manage their investments for changing risk tolerance.
The small number of SMSF benefits quoted is very simplistic and narrow. If that all you think a SMSF can offer you have it very wrong. I have had older clients with 100% term deposits in a SMSF and its cheaper than the best industry funds for larger balances. SMSFs can utilise a infinite number of strategy combinations that other funds cant. Only a SMSF can offer both a pension and accumulation account in the same fund. Only a SMSF allows more than one persons investments to blend with their partners so that joint acquisitions can be made etc...The list of SMSF benefits is very very extensive.
Really a generalisation since they don't publically disclose. Anecdotally nobody with a bad SMSF outcome brags about it. Arguably very few SMSF members would even know what % return they achieve since its usually a share of the net income not a % return.
- Some do well
- So do very poorly
- Many retail industry members could benefit from a SMSF
- Many SMSF members could do better with a retail / industry fund
- Many people think they can beat the professional managers who have years of experience and qualifications and access to complex financial products to mitigate risks etc. They don't get paid the big bucks for losing money.
- Some utilise strategies other funds cant access (property, joint investments, no fees except admin and compliance etc
I see people in industry funds aged over 55 who haven't used a pension strategy. But then I see them with a smsf and they don't also.
Zimby its hard to generalise, but if we separate the effort of maintaining the investments (effort in SMSF should be roughly the same as outside SMSF), then 1-2 hours a week should be plenty.
More effort is required at annual return time.
As I said in my first post, if you are not the type to want to really understand your obligations as a trustee (ie be willing to read and critically analyse documentation, question things you don't understand and keep yourself abreast of changes in the various legislation) then you may find being an SMSF trustee unenjoyable. I guess it could be argued that what I've just said applies equally to managing your affairs outside an SMSF, but you are far less likely to get away with being lazy as a trustee and may incur the wrath of the ATO if you do something contrary to the law. The financial penalties can be severe over and above any losses you incur - this is an extra amount of risk.
Can I suggest that you read the material on the ATO website, its actually pretty good!
CT
