With over 600,000 SMSFs currently operating in Australia, it has never been more important for trustees to seek the services of qualified professionals.

Australians are increasingly switching to SMSFs to help secure their financial futures, attracted to the control and flexibility offered by independent retirement planning. However, managing an SMSF can be incredibly complex, with trustees responsible for delivering strong investment outcomes for members while also ensuring compliance with ever-evolving tax and regulatory obligations. Recent market volatility, elevated inflation, higher interest rates, and broader macroeconomic uncertainty have further complicated this challenge.

Regulatory changes, challenges, and strategies for success

Embarking on a journey as an SMSF trustee can offer substantial financial rewards and exceptional flexibility. However, this path also entails the crucial responsibility of staying abreast of legislative changes and regulatory updates.

The government announced in February 2023 that it plans to introduce a $3 million superannuation cap in 2025–2026. The cap would mean that the earnings on balances above $3 million would be taxed at 30% rather than the current standard 15%.

Concerns have been raised that the change could disproportionately impact SMSFs. Despite the change not being introduced for another two years, 24 per cent of SMSF holders have already been observed speaking with their advisers about what the change could mean for them, according to Investment Trends.

The proposed cap has raised concerns that eligible SMSF members might consider withdrawing their entire superannuation balance to circumvent the cap. Not all SMSF members will be impacted by the change, and there is no indication that withdrawing all your benefits is what should be done, and for many smaller balance holders, the cap may not present an issue.

Methods for staying up to date

The regulation of super and SMSFs is a complex area.

With so much for SMSF trustees to stay on top of, there are methods and a wide range of resources that can be followed to ensure they stay up to date. Many in the industry provide webinars, podcasts, blogs, and daily email alerts to keep you updated, and it’s easy to get overwhelmed.

Remember to reach out to us as your financial adviser if you have any questions about your SMSF.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.

We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.