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How long does it take to set up an SMSF?

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setting up an SMSF
Self Managed Superannuation
By
John Liston
John Liston
Director | Adviser
December 13, 2019
5
minute read

A step-by-step timeline to setting up your SMSF the right way

So, how long does it take to set up an SMSF? That really depends on you, and the level of detail and care you’re willing to put into it. We typically advise the following SMSF setup times.

Setting up your SMSF


[table]
[tbody]
[tr]
[td]Deciding on an SMSF as the right structure[/td]
[td]1 week[/td]
[/tr]
[tr]
[td]Preparing a Statement of Advice[/td]
[td]2 weeks[/td]
[/tr]
[tr]
[td]Setting up your fund and the trust deed[/td]
[td]2 weeks[/td]
[/tr]

[tr]
[td]Registering your fund with the ATO[/td]
[td]3 days[/td]
[/tr]

[tr]
[td]Setting up your bank account and arranging your super rollover[/td]
[td]1 week[/td]
[/tr]

[tr]
[td]Getting online access to view your fund[/td]
[td]1 day[/td]
[/tr]

[tr]
[td]Setting up broking accounts[/td]
[td]1 day[/td]
[/tr]

[tr]
[td]Investing your money[/td]
[td]3 days[/td]
[/tr]

[tr]
[td]Total time[/td]
[td]4—6 weeks[/td]
[/tr]
[/tbody]


[/table]


Getting the right advice at the start can make all the difference to the long-term success of your self-managed super fund. For expert guidance and support in setting up an SMSF, contact Liston Newton Advisory today.

How long does it take to set up an SMSF?

A self-managed super fund is a major investment decision, and a structure that you will likely hold for the rest of your life. So when you set one up, it’s important to take the time to get it right, and understand all the decisions you’re making.

SMSF setup times will vary depending on your level of knowledge, and the support you’re receiving. However, you should allow at least 4 to 6 weeks from start to finish when setting up your SMSF.

What’s involved at each step of the SMSF process

how long does it take to set up an smsf

Below are the typical actions you would take when setting up your SMSF, and the approximate SMSF setup times you can expect.

Deciding on an SMSF as the right structure

Time: 1 week

When you begin thinking about setting up an SMSF your first step should be to meet with a licenced financial adviser. They will assess your current financial situation and your investment goals, and explain all the different superannuation options available to you.

With your adviser’s support, you can determine if an SMSF is right for you. If you decide to proceed with your plans, you’ll also need to determine the insurance strategy and investment strategy for your SMSF.

Preparing a Statement of Advice

Time: 2 weeks

Your adviser will then prepare a Statement of Advice (SOA) which determines if an SMSF is appropriate, and provides official documentation of this advice. Once you sign off on the advice you can begin the process of setting up your SMSF.

Preparing your Statement of Advice also includes:

Insurance considerations

Time: 2-3 days

As the trustee of your SMSF, you need to discuss with your SMSF the type of insurance you may need, and the necessary levels of cover. You also need to determine whether the insurance is held inside or outside your SMSF.

Preparing your SMSF investment strategy

Time: 1 week

This can be one of the biggest contributors to your SMSF setup time. Your SMSF investment strategy needs to demonstrate that you understand the risks involved in managing your SMSF. It should include information on:

  • Expected levels of risk and returns
  • Diversification of investments
  • Liquidity requirements
  • Ability to meet payment obligations

Your strategy is required to demonstrate that you’ve given the appropriate consideration to managing your investments.

Setting up your fund and the trust deed

Time: 2 weeks

Your adviser will then create a trust deed which establishes your SMSF. At this point you will need to choose a name for your SMSF, for example, The John Smith Superannuation Fund. You may also create a company to act as the trustee of your SMSF.

SMSF setup times can vary at this point. You will need to register an ABN, and the company acting as trustee will need to register an ACN with ASIC.

Registering your fund with the ATO

Time: 3 days

Your SMSF then needs to be registered with the ATO and you need to create a Tax File Number (TFN) for it. This TFN must be separate to your individual TFN, and is necessary to lodge your SMSF’s tax returns each year.

Setting up your bank account and arranging your super rollover

Time: 1 week

Once your SMSF has a trust deed, TFN, ABN, and ACN, you can then set up a bank account. Most banks will allow an SMSF to set up a bank account. However, you should avoid any banks that charge an account-keeping fee. Most banks are now fee-free, but it pays to check.

Once you have a bank account you can then rollover your super from your existing super funds. You can do this by requesting and completing a rollover form from your current super funds. Again, SMSF setup times can vary here too, depending on how efficient your existing super funds are.

In important note for sole traders: You might be planning to claim the current financial year’s personal super contributions as a tax deduction. If so, you must submit a notice to claim to your existing super fund prior to rolling over.

Getting online access to view your fund

Time: 1 day

Contact your bank to set up online banking for your SMSF account. For most banks, this is available immediate upon account setup.

Setting up broking accounts

Time: 1 day

Now it’s time to invest your money. If you’re investing in shares you will need a broking account set up in the name of your SMSF. If you’re investing in managed funds or term deposits, you will also place these in the name of the SMSF.

Investing your money

Time: 3 days

Once your accounts are set up you can begin making investments in the name of your SMSF. Just select your SMSF bank account to receive the investment income throughout the year.

The final work on SMSF setup times

how long does it take to set up an smsf?

Asking “how long does it take to set up an SMSF?” is like asking “how long is a piece of string?”

There are a lot of moving parts involved in setting up an SMSF. You need to take plenty of time at the start to consider you options, and ensure an SMSF is right for you.

So SMSF setup times can vary, and whatever you do, don’t rush it. An SMSF is a long-term decision, and a structure that’s set to benefit you for the rest of your life.

To make the best choices for a prosperous future, we recommend consulting a financial adviser to guide you through the process.

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