Is it better to manage your own super?
THANKS to the volatility in world stock markets, the returns from many superannuation funds have been less than hoped for.
This has led once again, to a spate of emails asking whether it's better to have your own self-managed super fund.
It's certainly a simple matter to start your own fund and any accountant or financial advisor would be able to refer you to a firm that specialises in handling the paperwork such as preparation of the Trust Deed.
Usually the costs to run your own fund are at least $2,000 a year so you would need to have at least $200,000 to make it viable.
Of course, when you start your own fund you still have to make a decision about investing directly or whether you opt for managed funds and let the experts make the decisions.
If you prefer the second option it may be simpler to just use one of the master trusts that will almost certainly be offered by your advisor.
Most master trusts include term deposits so it is possible to stay in the superannuation area and still access some of the high interest rates that are currently around.
I have no objection to anyone starting their own fund, but you need to clearly understand what you hope to gain by doing so.
If you believe you are a better judge of asset allocation, or choosing shares, by all means go ahead. But you would need a good track record in this area to justify the decision - if you get it wrong you may well find that your performance is worse than the full time fund management professionals.