• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Etax - Australian Online Tax Return 2022

Tax returns are easy at Etax

  • Home
  • “How To”
  • Tax Calculator
  • FAQ
  • Info
    • Etax Blog
      • Tax Advice
      • Tax Guides for Your Job
      • Tax and Your Budget
      • Tax News
    • Tax Return Checklists
    • Non-Lodgment Advice
    • Tax Free Threshold
    • “Tax Refunds 101”
  • About
    • Contact
    • Reviews and Feedback
    • More About the Online Tax Return
    • Tax Return Preparation Fees
    • People at Etax
    • Careers
  • Password Help
  • Login

APRA Super-fund or a Self-Manged Super Fund?

Choosing the Right Super Option for Your Unique Needs

Self managed super funds vs industry super funds
Superannuation is an important financial investment for every Australian. But which super option is best for you?

Self-managed super funds (SMSFs) are growing in popularity and more Australians are using them to build their retirement funds. But what are SMSFs and, most importantly, are they worth it? We provide you a comparison between the two most popular options, self-managed and APRA-regulated funds, to help bring you up to speed.

Definitions

What is a self-managed super fund?

A SMSF is simply a superannuation fund that meets two set criteria.

Criteria #1

First, SMSFs can only have four members or fewer, whereas large industry super funds have hundreds of thousands of members.

Criteria #2

The decision-makers, called trustees or directors, are members of the self-managed super fund. As a simple analogy: consider the SMSF as a sole trader or small business, where the manager (decision-maker) is also an employee of the business. The ATO regulates SMSFs and requires regular reporting, the same as any other taxpaying entity.

What is an APRA regulated super fund?

An, Australian Prudential Regulation Authority (APRA)-regulated fund is another type of superannuation fund.

Most Australian taxpayers have their superannuation invested in APRA-regulated funds.

These include industry super funds, corporate super funds and company super funds. They are large funds with many thousands or even millions of members, and professional teams that run the super fund like any other large organisation.

Advantages of self-managed super funds

Control

The biggest advantage of a SMSF is the investment control it gives its members. On the other hand, professionals direct large superannuation fund and members are less involved in specific investment decisions.

Flexibility

Large superannuation funds manage millions or billions of dollars of assets. The sheer amount of money they manage limits them to large, publicly tradeable assets, such as Australian and international shares, fixed interest (bonds) and large property assets like office towers and commercial real estate. SMSFs can invest in these as well, but they are also able to spread their investment allocation to small property holdings.

Market agility

This flexibility and control also means that self-managed super funds can sometimes move faster than their APRA-regulated counterparts when market conditions change.

Property as an Investment

Many retirement savers with a SMSF also appreciate the ability to hold property interests inside their superannuation savings.

But there are some disadvantages of self-managed super funds too…

It’s also important to understand the challenges an SMSF might bring.

Compliance

Staying on top of regulatory rules and obligations can be a challenge. Every year the rules change slightly. You (or your advisors) will need to stay on top of the changes to ensure you are not breaking the law. On the flipside, APRA-regulated funds have many employees. They are therefore, usually in a much better position to adjust investments should superannuation rules change.

Time costs

From a member perspective, self-managed super funds can also be costly and time-consuming. In fact, 38% people that participated in a 2018 Australian Securities and Investments Commission (ASIC) study stated that running and managing their SMSF was a bigger time investment than they had originally planned for. Much of that time was spent not on investment decisions, but on administration and legal compliance.

Financial and legal costs

32% of respondents in the ASIC study reported that the set-up costs and ongoing administration fees were more than they had budgeted for. A further 29% were under the mistaken belief they were entitled to legal protections and compensation for fraud and theft involving their SMSF.

Self-managed super fund performance statistics and data

Ok, so SMSFs and APRA-regulated funds have plenty of positives and negatives, but what about their performance?

As of late 2018, there were just under 600,000 SMSFs, representing 1.125 million Australians.

There’s only five full years of data on which to judge SMSFs, but it doesn’t make for overly positive reading. In all but one of the years, APRA-regulated superannuation funds outperformed SMSFs – and quite substantially, with the average APRA-regulated fund performing 10% and 30% (in relative terms) better. In the single year where SMSFs won, the difference was negligible.

The Self-managed super fund takeaway

Self-managed super funds can offer control, flexibility and sometimes greater choice. However, the statistics also suggest that, on average, they under perform against APRA-regulated funds and can be more costly and time-consuming than anticipated.

That doesn’t mean that a SMSF is a bad choice for you as everyone’s circumstances are different. Therefore, it’s important to seek detailed financial advice relevant to your personal circumstances.

Please note: The information on this page is general in nature and should not be relied upon as detailed advice. Each situation is different and we recommend you seek the advice of a licensed financial planner and or/tax agent who can assess your unique circumstances and provide you with detailed advice as to the best superannuation option for you.

Popular Articles

  • 5 Smart Ways to Spend Your Tax Refund
  • Tax Deductions for Nurses (with infographic)
  • Being made redundant could re-ignite your career
  • 10 Easy Ways to Pay Less Tax
  • Manage Your Receipts and Boost Your Tax Refund
  • How To Use a Car Logbook
  • Claim Work-Related Travel Expenses
  • How Much Super Will Be Enough?
  • Deductions for Rental Property Owners
  • Simple Ways to Improve Your Tax Refund

Primary Sidebar

Important Dates and Tax Deadlines

2022 Tax Return
For your income between
01 July 2021 – 30 June 2022
Click To Start Your 2022 Tax Return

2021 Tax Return
For your income between
01 July 2020 – 30 June 2021
Overdue – click to start now

All Other Years 
Overdue – click to learn more

You can do your tax return right now, online, with friendly support

Search

Categories

  • Tax Advice
    • 2022 Tax Return
    • Increase Your Tax Refund
    • Medicare and Private Health Insurance
    • Superannuation
    • Tax Deductions
    • Tax Rebates
  • Tax and Your Budget
    • Budgeting and Saving
    • Managing Debts
    • Personal Finances
    • Rental Income
    • Tax Saving Tips
  • Tax Guides for Your Job
    • Australian Defence Forces
    • Home Office
    • Occupation Tax Guides
    • Small Business
  • Tax News
    • Etax Announcements
    • Income and Economy
    • The ATO and Government

Finish Your Tax Return in Minutes

Get Started Now

Returning Users Login

Click here for password help.

Your return will be reviewed and checked two times at Etax before lodgement – giving you the confidence it was done right.

Recent Tax News & Updates

  • Claim Home Office expenses and increase your tax refund
  • 5 Smart Ways to Use Your Tax Refund This Year
  • Save receipts and deductions to fast track your 2023 tax return
  • Working from home due to COVID-19?
  • Can’t work due to COVID? What help is available?
  • COVID Tax Deductions (And Other Changes To Your Return)

Facebook

Social

Find Etax on Twitter Visit Etax on LinkedIn Share on YouTube Etax on Google+Share on PinterestShare on Facebook

Finish your tax return in minutes

Get Started NowReturning Users Login

Forgot your password? Click here for login help


Verified Security

Etax Accountants Secure SSL Encryption

Registered Tax Agent
TPB Registration #69399005

Etax Accountants is a TPB registered tax agent

Accredited Members
Etax Accountants is a CPA Practice

Etax is a member of CPA Australia

Quality Assurance

Etax maintains ISO 9001 certification for quality management systems

Information Security

Popular Pages

► Get Started (new users)

► Login (existing users)

Password & Login Help

myTax, e-tax, tax agents…?

Tax Help in 40 Languages

About Tax Agents

Tax Online: Your Options

Etax Reviews

myGov Tax Return and Etax

myTax vs Etax.com.au

Find Tax Deductions

The Etax Blog: Tax Tips

Important Links

What’s New at Etax

2022 Tax Return

Tax Deduction Basics

The Etax Mobile App

Online Safety

Terms and Conditions

Security | Privacy

Etax FAQ

Income Statement

Where’s My PAYG?

Download Etax Resources

Late Tax Returns

Non-Lodgment Advice

Tax Checklists

Etax Careers

 

Etax is Australia's #1 online tax service

© Copyright 1998–2022 Etax Accountants Pty Ltd
Etax® is a Registered Trade Mark of Etax Accountants Pty Ltd
Liability limited by a scheme approved under Professional Standards Legislation
  • Etax Home
  • FAQ
  • New Users Start Here
  • Etax Login
  • Password Help