Your Role as a SMSF Trustee
Whilst there are significant benefits associated with establishing a SMSF, there is also significant responsibility which should be considered before setting up your SMSF.
- Responsibility for the ongoing compliance, administration and decision making for your fund;
- The need to maintain your knowledge of investments and legislation surrounding SMSFs;
- The potential for poor performance if your money is not managed wisely;
- The potential for non-compliance in your fund.
As a SMSF Trustee, you are legally responsible for ensuring your super fund complies with SIS legislation and the super fund trust deed. These rules bind you to:
- Act honestly in all matters concerning the fund;
- Exercise the same degree of care, skill and diligence as an ordinary prudent person in managing the fund;
- Act in the best interests of all fund beneficiaries;
- Keep the money and assets of the fund separate from other money and assets (for example your personal assets);
- Retain control over the fund;
- Develop and implement an Investment Strategy;
- Not enter into contracts or behave in a way that hinders trustees from performing or exercising their functions or powers; and
- Allow members access to certain information.
People who willingly do the wrong thing in their SMSF face imprisonment and there are significant penalties associated with non-compliance in a SMSF.
However, these can be minimised by appointing a SMSF Specialist Administrator and developing a sound investment strategy with your Investment Adviser.
To find out more about the roles and responsibilities of trustees