SMSF vs Retail Superannuation - What is the difference?

Additionally, the process of setting up an SMSF is not at all simple and comes with many technical complexities. If you are looking to transfer your UK pension to your SMSF, then in order for your fund to accept UK Pension monies, you must first apply to HMRC in the UK to register your fund as a Qualifying Recognised Overseas Pension Scheme (QROPS),  which not straight forward and can be time-consuming.

For more information on Self-Managed Super Funds, view our article What is an SMSF?

You can also view the Australia Tax Office guidance for setting up an SMSF HERE.

Retail Superannuation Funds like our Australian Expatriate Superannuation Fund are very similar to the structure to a UK Personal Pension plan in that all of the ongoing day to day administration and management is handled by us as the provider and not you. This removes the administrative and time burden away from you as the investor.

Compliance and management reporting responsibilities are also handled by us, the same way Personal Pension Plans operate in the UK. You also do not need to worry about the complex set up process and QROPS registration with HMRC, in order for your fund to be able to accept your UK pension monies, this is all in place with our Retail Fund.

The key difference in structure between both funds may be a reason that we are seeing cases where individuals are opting to set up a Retail Superannuation fund over an SMSF, particularly those who are transferring a UK pension to Australia, as it is a simple set up and transfer process in comparison to an SMSF.

Many people also prefer to save for their retirement in a secure product without the ongoing administrative headache that may come with a Self-Managed Super Fund. We are finding that most people we talk to would favour the structure of a Retail Fund over a Self-Managed Fund, once it has been explained to them.

For more information regarding Retail Superannuation Funds, check out our guide HERE!

So you are now probably wondering why would someone want to set up an SMSF instead of a Retail Superannuation Fund, only to be faced with much more management responsibility, potential liabilities, heavier administrative duties and the requirement to have a thorough understanding of Superannuation and the financial markets?

There are of course advantages to both products but it all really boils down to your circumstances, preference and investment objectives. As mentioned, some people may prefer to avoid the administrative responsibilities involved with Self-Managed Super Funds, where others may not. There may be cost advantages of using a Retail Super fund, depending on the amount of money you are transferring to Australia.

We are not authorised to provide you with any personal or financial advice so we cannot tell you which product suits you best, we can only provide general advice on your options. You should seek financial advice from a qualified Financial Adviser to understand the best advice option for you based on your circumstances.

If you would like to find out more about Retail Superannuation Funds or have any questions regarding UK Pension transfers to Australia, contact a member of our team today and we would be happy to answer any questions that you may have.