Are you doing a job where you are responsible for the performance of a portfolio of investments, but you have very little time for research? Does this job involve trying to keep up with constantly changing regulations and managing a stack of administration? Are you struggling to set aside time to plan while reviewing your current position? Then you must be a trustee of a self-managed superannuation fund (SMSF).
As many trustees are finding out, there are many responsibilities that go with the role. Chief among them is the knowledge that if a fund trustee makes poor investment choices, their lifestyle and that of the other fund members could be adversely affected in retirement.
A recent survey of SMSF trustees named the five most difficult tasks that come with managing your own fund; the top two were ranked by over 30% of survey respondents. The next two were ranked by 16% of respondents and the final difficult tasks were a lowly 12%.
It is no surprise that choosing investments was the most unpopular task, and the one that weighed heavily on the shoulders of the trustees. They were all doing their best to place SMSF funds in secure investments that gave a good return but were very conscious of the consequences if they made an honest mistake.
Having to deal with changing regulatory requirements was next. Everyone agreed that an environment where superannuation rules were not subject to constant change would give trustees the confidence to make decisions without needing external advice. This kind of uncertainty is stressful and made them apprehensive about even minor issues.
Time is money as the saying goes, and this is very pertinent to those trustees who struggle to find enough time to research investments. This, along with the first unpopular task of choosing investments makes investing an area where inexperienced fund trustees can quickly find themselves in trouble.
Administering the fund, keeping records and lodging the required returns on time are all tasks that require attention to detail and superb organisation. If a trustee does not have these attributes, it will always be a struggle to keep track of everything. Thankfully, there are companies like SMSF Assure that will take over this burden.
Finally, planning and reviewing are the two tasks at the bottom of the list, possibly indicating that most trustees would rather do these than any of the others. However, all tasks are of equal importance because they are all part of the responsibility of being a fund trustee.