For anyone considering setting up a self-managed super fund, the updated guidance released recently by the regulator is essential reading. Aside from highlighting the risks associated with having an SMSF and the importance of professional advice, the Australian Securities and Investments Commission abandons the recommendation of a minimum balance of $500,000 to set up a fund.

In essence, what ASIC says in Information Sheet 274, Tips for giving self-managed superannuation fund advice, is that while a superannuation balance remains important, it is just one factor potential SMSF trustees must consider before embarking down this path. To quote the regulator, “other important factors include the risks and costs associated with setting up and/or switching to an SMSF, investment strategies, diversification, liquidity, asset choice, trustee responsibility and time commitment, and the potential benefits of professional advice when deciding to set up and/or switch to an SMSF”.