Self Reliance. Looking after your self managed super. Macquarie Cash Management Trust Smart cash management solutions made simple

Transcription

1 Macquarie Cash Management Trust Self Reliance Looking after your self managed super Macquarie Cash Management Trust Smart cash management solutions made simple October 2007

2 Please note: This booklet is dated 0ctober 2007 and is subject to change without notice. We recommend you seek professional advice about any changes, including changes to the Law, which may affect the contents and information provided. This booklet is only intended as a general guide to some of the issues involved with self managed superannuation funds (SMSFs). There are a variety of super and retirement options which may be better suited to your objectives, financial situation or needs. Decisions should only be made after seeking appropriate independent professional advice. This is not designed to be a comprehensive guide on SMSFs. The guide only broadly discusses some of the aspects of SMSFs and although the booklet discusses some of the features of SMSFs, Macquarie does not have a bias to any particular type of super fund structure and in fact offers a range of larger fund alternatives in addition to the products and services offered to the SMSF market. Setting up an SMSF involves decisions about tax, investment and superannuation legislation. This guide is not an appropriate source for you if you are unfamiliar with the responsibilities of being a trustee. The information in this document is provided on the assumption that you have established your eligibility to make superannuation contributions and have an understanding of the general issues surrounding superannuation including preservation, contributions, and eligible termination payments (ETPs). This booklet does not cover all the general issues surrounding superannuation. If you do not feel your knowledge around superannuation is adequate, you should speak to your financial adviser for further information. Then you can determine if an SMSF structure is appropriate for your needs. Macquarie Investment Management Limited ABN (MIML) is not an authorised deposit-taking institution for the purposes of the Banking Act (Cth) 1959 and MIML s obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of MIML. The Macquarie Cash Management Trust, Macquarie Super and Pension Manager, Macquarie Super Accumulator, Macquarie Investment Manager and Macquarie SuperOptions are offered by MIML. This advice is not personal advice. This advice has been prepared without taking account of your objectives, financial situation or needs. In deciding whether to acquire or continue to hold an investment, and before acting on this advice, you should consider the current offer document or Product Disclosure Statement (PDS) which is available from us and assess, with (or without) your financial adviser, whether this product fits your objectives, financial situation or needs. Applications can only be made on the application form contained in the current PDS. Any financial product advice provided by us is free of charge. We (MIML) may receive remuneration for distributing financial products issued by other Macquarie Group companies.

3 Contents 02 Control your super. The growth of self managed super 03 A definition. What is a self managed super fund (SMSF)? 04 Good help. Experts you can turn to 05 The virtues of self-reliance. The benefits of self managed super 09 Dollar sense. Your investment strategy 11 Red tape and paper chases. The other side of self managed super 12 Opportunities and obligations. A quick guide 14 A suitable choice? SMSFs and you 15 A checklist. What you need to get started 17 Effective cash management. CMTs and SMSFs 18 Cashflow management made easy. 19 Choice and control. Some options 20 Want more information. Some helpful sources

4 Control your Super. The growth of self managed super Australians are investing vast sums of money into self managed super funds (SMSFs). In June 2007, approximately AUD$ billion was in self managed super funds. That s roughly one in four of all the dollars invested in super in Australia 2. Research has indicated that the mindset of an SMSF member is characterised by control, self-determination and a preparedness to take responsibility 2. What makes self managed super so popular? SMSFs, may offer greater control and cost-effectiveness over other forms of superannuation. The choice of funds has enabled many employees to request their employer to direct super contributions to a fund of their choice, including their SMSF. If that sounds like you and if you want to have a good understanding of superannuation and its complexities, we suggest you keep reading. Self-reliance is the only road to true freedom, and being one's own person is its ultimate reward. Patricia Sampson 1 APRA Quarterly Superannuation Performance, June p7. Figures are estimates based on the 2006 Asset figures. See page 7, of APRA Quarterly Superannuation Performance June Self Managed Superannuation Funds A Qualitative research report presentation. Creative Catalyst Insights for the Australian Stock Exchange. November pp 18 and 34.

5 A definition. What is a self managed super fund? The Superannuation Industry (Supervision) Act 1993 (SISA) defines an SMSF as a superannuation fund that, broadly, meets the following conditions has fewer than 5 members each individual trustee (or director if there is a corporate trustee) of the fund is a fund member (unless it is a single member fund) each member of the fund is a trustee (or a director of a corporate trustee) no member of the fund is an employee of another member of the fund, unless those members are related no trustee of the fund (or any director of a corporate trustee) receives remuneration for his or her services as a trustee. (Note: trustees can receive remuneration for non-trustee services they provide to the fund in a separate professional capacity.) The key differences between an SMSF and other superannuation funds are the limited number of members the control those members have over the fund the fact that the members are all trustees and therefore have very significant legal responsibilities Almost anyone can set up an SMSF; an individual employee; an employer; or someone who is self-employed. Due to the detailed responsibilities of running an SMSF, many investors seek expert advice from financial advisers, accountants and solicitors. Generally, SMSFs are set up in connection with small businesses and for families, but other types of investors are increasingly using SMSFs. We recommend that you consider your own objectives, financial situations and needs before deciding to embark on your own SMSF journey.

6 The virtues of self-reliance. The benefits of self managed super Control An SMSF allows you, the trustee, to take responsibility for managing the investment strategy and the underlying investments for the fund as a whole. This allows you to take control and create a superannuation investment portfolio that meets the exact needs of all members. As with many retail super funds that offer a broad range of investments and member level investment choice, SMSFs enable investment decisions to be made that will take into account each member s age, existing assets, likely retirement needs, risk profile and contribution pattern. Choosing investments for your retirement It s important to keep in mind that you generally cannot access your super until retirement, so choosing the right investments that assist you in saving for your retirement is vital. SMSFs, along with many leadingedge retail funds, offer investments in managed funds as well as direct assets such as bonds, shares and derivative products like warrants and options. In some cases, you can also transfer listed securities (e.g. shares) that you hold personally into your super fund. While this may crystalise a capital gains tax (CGT) liability, it saves you the inconvenience of having to sell the security if you want to hold it within the tax-effective superannuation environment. The consequences of such investment choices are best explained by a taxation specialist and you should seek this specialist advice prior to undertaking any decisions. Despite the wide choice of investments in both the SMSF and retail market, some investment sectors such as collectable investments are likely to remain the exclusive domain of SMSFs. Of particular interest to small business owners is the ability for SMSFs to acquire business real property (such as an office or factory) from a member or other related party of the fund. The property can be held by the fund and leased back to a related party of the fund. These transactions must occur at arms length. The property must be bought at market value and, where leased, a proper lease arrangement must be in place. Definition Related party A related party of the fund broadly includes a member of the fund, an employer-sponsor of the fund, or a relative or other associate of either party. Definition Business Real Property Business Real Property is land and buildings that are wholly and exclusively used for business purposes.

7 Although the SMSF structure can offer much flexibility in regard to investments, there are also a number of restrictions designed to help safeguard the retirement benefits of its members. Broadly, SMSFs must ensure the fund has an appropriate investment strategy not borrow 3 not lend money or provide financial assistance to members or their relatives not give a charge over assets of the fund not invest in in-house assets which exceed the 5% in-house asset threshold. Broadly, an in-house asset is where an asset of the fund is a loan to, or an investment in, a related party of the fund. It also includes an asset of the fund that is subject to a lease arrangement between the fund and a related party of the fund. Some exceptions apply. Tax benefits 4 As with other superannuation funds, SMSFs can offer significant tax benefits. When in the accumulation phase, these may include tax incentives for certain contributions in the form of a tax deduction or a Government co-contribution in respect of certain qualifying contributions maximum 15% tax on investment earnings of the fund compared with a maximum of 46.5% 5 outside superannuation an effective tax rate of 10% for any capital gains realised on fund assets held for 12 months or more the flexibility to manage individual members tax positions tax concessions on withdrawal When you are in the pension phase of the fund (and where the fund assets are held solely for the purpose of paying a current pension) any income or capital gains earned on those pension assets is exempt from tax within the fund. As fund trustee, if you hold Australian shares directly within the fund, any tax payable by the fund may be reduced if the franking credits these shares generate are used to offset other fund tax liabilities (such as contributions and earnings taxes). You can also control the timing of buy and sell decisions. For example, as fund trustee you can buy and hold shares while you are working, then sell them to provide a pension when you retire. Given that the proceeds support the payment of a pension, the fund will not pay Capital Gains Tax (CGT) on the disposal of those shares. 3 With the exception of short-term borrowings to assist in the payment of benefits, the payment of a surcharge liability, or to cover the settlement of securities transactions. 4 The taxation information provided in this booklet is current at the time of printing, October Top marginal rate of 45% plus 1.5% Medicare.

8 Definition Franking credits A franking credit is a credit for the tax a resident company has paid on its profits. The franking credit is attached to the dividend (or similar distribution) and included in your, the shareholder s, assessable income. You may then be entitled to a tax offset equal to an amount equivalent to the franking credit. Retirement income SMSFs can pay members benefits in the form of a retirement income stream which can be tailored to meet the needs of members in their retirement. From 1 July 2007, typically, the most common pension an SMSF will pay its members is an Account based pension. Account based pensions offer the member underlying investment choice, access to capital and flexibility on the level of total annual income payment (within government limits). An account-based pension must satisfy a number of minimum standards, broadly described as: no contribution or rollover can be added to the pension once it has commenced. no residual capital value set in place at the outset on death of the pensioner the pension can be committed to a lump sum and paid to one or more dependants or the deceased estate. The pension can only be transferred to a dependant of the pensioner who is not a child, or a child where certain limited circumstances are met. minimum annual payment amount expressed as a percentage of the account balance at the relevant time each year no maximum annual payment amount except for transition to retirement account based pensions which have a maximum annual payment amount of 10% You should seek specialist advice as to the most appropriate pension or blend of pensions to suit your circumstances. Definition Account based pension A retirement income product that allows an individual to invest a lump sum and then draw down an annual pension until the capital sum is exhausted. Should the investor die before their capital is exhausted the balance can be paid to one or more dependents or their estate.

9 Life insurance benefits Fund members are able to obtain life insurance cover through a superannuation fund, including an SMSF. The premium may be a tax-deductible expense to the fund and the benefit of this deduction may be passed on to the relevant member. On death, if the proceeds are paid as a lump sum benefit to a dependant of the member, they are tax-free. The fund can also pay the death benefit to certain dependants of the member as a tax-effective income stream. Effective estate planning options The growing significance of superannuation savings means it is important to consider your retirement savings strategies, and also ensure that your super fund is an effective vehicle for transferring wealth between generations. With the help of specialist lawyers and actuaries, sophisticated benefit designs can be put in place that will facilitate to whom and how death benefits can be distributed often including payment in the form of an income stream. Definition Dependant A dependant includes a spouse (married or de-facto), a child of any age (including adopted children and step-children), any person financially dependent on you, or a person with whom the member has an interdependent relationship. Taking full advantage To enjoy the many tax, investment and estate planning benefits of SMSFs, all of your planning strategies must complement each other. Professional advice from accountants, administrators, solicitors and financial advisers can ensure your SMSF meets all your needs.

10 Dollar sense. Your investment strategy One of the most important responsibilities of SMSF trustees is to create and implement an investment strategy for their fund. SMSFs are required to produce benefits for the retirement of all members and their future beneficiaries, and as a result their investment choices must reflect this. SMSFs cannot invest in assets for members personal gain or use. Your strategy must: take account of the likely return from the investments, having regard to the fund s objectives and expected cashflow and liquidity requirements be appropriately diversified investing across a number of asset classes (e.g. shares, property, fixed interest, cash) as part of a long-term investment strategy ensure the fund can pay benefits and other costs as they become due The investment strategy must outline the specific investment objectives and approach of your SMSF. As a trustee, you must ensure all investment decisions are consistent with the investment strategy. You should seek investment advice or appoint an investment manager if you do not have the skills or time to develop a strategy. However, even if you do appoint an investment manager, you are ultimately responsible for investment decisions. The ATO suggests you document the investment strategy of your SMSF. Having a written strategy can be a legal protection if an investment decision goes wrong but was in accordance with the fund s strategy. All investment management decisions and any external advice should be recorded in writing. The importance of implementing an investment strategy and regularly reviewing it should not be underestimated. It may affect the lifestyle you (and others) enjoy in retirement. An investment in knowledge still yields the best returns. Benjamin Franklin ( )

11 Your investment objectives While SMSFs serve the needs of closeknit groups such as business partners or families, they also must meet the different needs of every member. An investment strategy designed for the soon to retire senior members may not deliver the long-term capital growth needed by members who are years from retirement. Who s in charge? Once you have established the fund s investment objectives you need to decide who will manage the money. Many SMSF members reveal their desire for control and independence by taking on this role. If you decide to take on this role you need to make sure you have the time, training and investment tools (e.g. cashflow management, investment and accounting systems, and broker relationships). If you don t, you may need to get professional help or advice on selecting investments that require less intensive day-to-day management. It s important to consider the extra costs involved in hiring expert help and the fees involved with each investment type. The strain placed on members due to factors including the time, effort and expense involved in managing the investments must also be considered. Asset allocation and security selection The asset allocation and security selection shape an investment portfolio. You need to ensure that your fund s asset allocation the balance between shares, property, cash, bonds and others assets meets your fund s investment objectives. Research indicates some SMSF trustees feel they do not have a great understanding of asset allocation 8. If the fund invests too much money in one type of investment it may limit potential returns or expose members to excess risk. Once your asset allocation is determined you need to select your securities. Security selection is the choice of specific investments (e.g. the shares, properties, managed funds, etc) that make up the fund. The quality of these decisions naturally affects the returns of the fund. 8 Australian Stock Exchange, Self Managed Superannuation Funds Market Research A Qualitative project Key highlights. November p4.

12 Effective cash flow management. CMTs and SMSFs Easy, efficient administration and quality reporting on cashflows can help make an SMSF successful. Cash Management Trusts (CMTs) can allow for quick and easy transactions and the production of quality reports, making record keeping easier. The Macquarie CMT also pays a competitive rate of return on the fund s cash. The Macquarie CMT is Australia s first and largest CMT. It was established in 1980 and has more than AUD$17.7 billion 9 in funds under management. The Macquarie CMT has the highest possible security rating (AAAm) from Standard & Poor s 10 for a fund of its type. The Macquarie CMT offers SMSF trustees significant benefits. Detailed records and reporting When using the Macquarie CMT each transaction appears on one consolidated statement making accounting, administration, tax returns, end of year auditing and long-term record keeping simple. Transaction reports can be downloaded and used in different software programs, providing your fund s adviser, accountant, administrator with the latest information, ensuring that they are giving advice on the most current information. Online flexibility and control The Macquarie CMT offers real-time access to account information so that you can keep track of payments including contributions, dividends, distributions, pension payments, expenses and asset purchases or sales. We are constantly introducing new, innovative, forward thinking services. Some of the services that help you manage your SMSF are n Transaction descriptions All fund transactions appear on one consolidated statement with easy to read transaction descriptions making tax returns, auditing, share broking reconciliation and long-term record keeping simple. n Audit letters online This service allows you to simply produce audit letters on your account, which can be particularly useful at tax times. n Tax payments The tax payment service allows you to make payments to the ATO in advance, as a one off or scheduled payment. You can also authorise your stock broker or adviser to make these payments on your behalf. Transaction fees The Macquarie CMT charges no transaction 11, entry or exit fees. 9 As at August Standard & Poor s Information Services (Australia) Pty Ltd ABN , referred to as Standard & Poor s. 11 Government, cheque book and other service fees may apply. 10

13 Cashflow management made easy. The Macquarie CMT allows you to take control of your SMSF. Using the Macquarie CMT as a cashflow management system you can make it simple to control, monitor and manage your SMSF. The Macquarie CMT provides you and your adviser with consolidated reporting and easy access to the latest information. By using the Macquarie CMT as the central cashflow management system for your SMSF, you, your adviser, and/or broker will have the information you need to make informed investment decisions. 11

14 Choice and control. Some options Administration platforms or Wrap accounts offer wide investment choice and high tech administration which can perfectly complement the SMSF structure. Wrap accounts, such as the Macquarie Investment Manager, offer SMSF investors a number of powerful advantages including n A cashflow management system n A wide range of investments Macquarie Investment Manager has over 500 fund options. n Better choice of managers Access to investment options not always available through ordinary super funds (e.g. boutique fund managers). n Cheaper management fees Management fees are generally cheaper than retail alternatives. n Easy administration Hold, monitor, report and manage all your investment options on one platform. Different people. Different investors. Different services. If an SMSF is not appropriate for you, Macquarie offers other solutions. n Macquarie Super and Pension Manager offers a cash hub; over 450 managed funds; absolute return options; administrative technology; and seamless transfer from the accumulation to pension phase. n Macquarie Super Accumulator has a variety of more than 100 wholesale managed funds and also allows for the seamless transfer from super to pension. n Macquarie SuperOptions offers a simpler approach and has a range of over 40 funds. Whatever services you choose, Macquarie offers you a broad range of choices and flexibility. Boutique fund managers Boutique refers to small fund management businesses that often specialise in a certain investment style and a single asset class. Typically, they are set up by highly regarded investment professionals who concentrate on investment management for large investors. 12

15 Red tape and paper chases. The other side of self managed super The sole purpose of any superannuation fund is to provide members with one or more of the following retirement benefits paid to members after they retire from gainful employment and reach their preservation age age specified benefits paid to members after they reach a prescribed age (currently 65) pre-retirement death benefits paying benefits upon a member s death. This generally means the benefits are passed on to a member s dependants or legal representative. SMSF trustees must be constantly aware that the fund is maintained with these core purposes in mind. Other ancillary benefits may be provided. Compliance SMSFs are one of the more heavily regulated investment structures. As a trustee you are responsible for all the compliance within the fund. Many SMSF trustees use the expert services of accountants, super fund administrators, auditors and solicitors. Even if you obtain external advice, compliance ultimately remains your responsibility. Your obligations as trustee include Legal obligations. You have to operate the fund in accordance with the trust deed, the provisions of the SISA covenants and within tax, corporations, family and trust legislation. SISA covenants. These covenants are deemed to be part of the trust deed of every fund. Among other things, they require trustees to act honestly in all matters affecting the fund act in the best interests of all members ensure fund assets are separated from your personal and business assets develop and implement an investment strategy keep members informed and allow access to information Housekeeping. As trustee, it s your responsibility to keep minutes of trustee meetings and financial records of the funds activities and cashflow, to prepare and lodge annual returns with the Australian Tax Office (ATO) and to have the accounts audited every year. The ATO treats breaches very seriously. The regulator can suspend or remove trustees, freeze the assets of the fund and declare the fund to be noncompliant, thereby removing the fund s tax concessions. As a non-compliant trustee, you could face up to five years imprisonment and/or civil action by other members or the regulator. To make sure the fund is compliant you may need to hire a professional adviser and/or administrator. This may increase the relative cost of running an SMSF when compared to a retail fund. The time required to properly manage an SMSF must also be considered. 13

16 Opportunities and Obligations. A quick guide The following table is a quick guide to some of the opportunities and obligations of SMSFs, and what this may mean for you. Opportunities You can often invest in a wider range of investment types including business real property. Superannuation can be very long-term investment. With careful and appropriate benefit design, SMSFs may facilitate effective accumulation, retirement and estate planning strategies. Limitations SMSFs are strictly regulated. Non-compliance carries serious penalties for you and your members. Benefits n More precise, personal asset allocation. An opportunity to integrate business and personal financial planning. n Potential for greater returns n This structure may create opportunities better tailored to the superannuation arrangements of you, your spouse and your children. n SMSFs provide financial performance based on your chosen level of risk. Result n Creates a heavy burden for inexperienced trustees if they choose to carry out all compliance obligations themselves. n May create additional costs if tax, investment and legal responsibilities are outsourced. 14

17 Limitations The fund cannot lend money or provide financial assistance to a member or a member s relative. SMSFs are restricted from investing more than 5% of the fund s total assets in in-house assets. (Refer to page 6 for more details.) While the fund may invest in art and collectables, access to these items may be restricted. Trustees cannot receive personal benefits from fund assets (e.g. a shareholder discount card). The funds investment strategy is the responsibility of the trustees. The fund s investment policies and administrative procedures must satisfy all trustees. Extensive record keeping (e.g. accounting records, annual returns and member reports must be kept for 5 years. Minutes of trustee meetings must be kept for 10 years). Result n Restrictions can limit investment flexibility. n Difficult to develop investment strategies that meet multiple needs. n Trustees need to continually observe the cashflow and manage investment decisions n Costs in time and money. n May need to employ professional support. 15

18 A suitable choice? SMSFs and you SMSFs are one of a number of superannuation fund options. You will need to consider your own circumstances and compare the various types of superannuation funds to see which meets your needs. It is important to seek independent and expert advice. Some of the issues you and your adviser may need to consider are Your objective n Will your retirement goals be best met by the SMSF structure? n Have you considered other options? n Will an SMSF complement your other investment strategies? The objectives of your co-members n Are you sure your fellow trustees/ members share the same objectives? Can you manage the investments? n Do you have the experience or expertise to manage investments? n Do you have the time to develop an investment strategy, the discipline to stick to it and the ability to execute it? Can you manage the compliance requirements? The increasingly strict regulation of SMSFs means it is vital your fund is always compliant and that your administration is thorough, timely and correct. Do you have the time and patience to meet these requirements and do you know where to find help? Managing the managers You don t need to be an accountant or an investment expert to run a successful SMSF. You can hire experienced professionals to help you. Do you have trusted, quality advisers? How much money do you need? Opinions vary so you should discuss it with your adviser. Obviously, as your fund balance increases, the relative costs are reduced. It is generally agreed that you need at least $200,000 before you should consider an SMSF. What will happen if your circumstances change? It is important to consider how the fund rules and benefit design would accommodate changing circumstances. How would you manage new members, or cope if existing members left the fund? Who would be trustee if you die? What would happen in the event of divorce? 16

19 A checklist. What you need to get started The following information is based on a broad outline suggested by the ATO relating to the establishment of an SMSF. For more information consult your adviser. What to do Obtain a trust deed Comments A Solicitor can arrange to provide you with a trust deed that confirms the existence of the trust and establishes the fund s rules. The deed needs careful drafting to achieve the fund s objectives. It must be dated and properly executed and may deal with issues including who the trustees are, their powers and how they are appointed or removed eligibility for membership conditions for accepting contributions and paying benefits winding up procedures Appoint trustees Elect to become a regulated fund Apply for a Tax File Number (TFN) and an Australian Business Number (ABN) In an SMSF, all members must be trustees. Trustees must ensure the fund is properly managed and complies with SISA rules and other legal obligations. To get concessional tax treatment a trustee must elect to be regulated within 60 days of establishing the fund. Elections are lodged with the ATO by completing an Application to Register Superannuation Entities form available online at or from the ATO s Small Business Infoline on Trustees must obtain a TFN by lodging an Application to Register Superannuation Entities form. Lodging this form also generates an ABN for the fund. 17

20 What to do Corporation or Pensions basis? Open a cash management account to manage your cashflows Appoint an auditor Prepare an investment strategy Appoint administrators and/or advisers Nominating the SMSF as your super fund of choice Comments To become a regulated fund the trustees must ensure that the trust deed either appoints a corporate trustee (Corporations basis). A corporate trustee is subject to the Corporations Act. A fund with a corporate trustee may pay benefits in the form of a lump sum OR states that the sole or primary purpose of the fund is to provide old-age pensions (Pensions basis). Under this option, the trustees may be individuals. The trust deed may also permit (but not compel) benefits to be paid as a lump sum. The account should be opened in the names of the trustees (as trustees of the XYZ Super Fund). SMSFs must have an annual audit prepared by an independent approved auditor. See pages 9 10 for details. You may decide to seek help with administering and managing the fund. While expert advice is crucial, trustees remain responsible for compliance. If you nominate your SMSF as the super fund of your choice for your employer, you must provide evidence that the fund is regulated by the ATO. This will come from the Tax Office and must include a notice of registration called Advice about regulation of your self managed fund for a new fund; or a letter of compliance called Notice of complying fund status self managed superannuation fund if the fund has been in existence for two years or more. 18

21 Good help. Experts you can turn to There are a number of sources of professional help and advice you can turn to when setting up and managing your SMSF. Expert Assistance Financial planners or advisers Accountants Auditors Administrators Solicitors Stockbrokers Licensed financial planners can help with establishing an investment strategy, setting appropriate asset allocation, controlling cashflows and selecting and managing investments. They are often also providers of advice on tax and estate planning. Accountants can offer advice on tax and estate planning and assist with tax returns and other tax obligations. They can also offer advice on asset allocation at a broad level, however unless licenced to do so, specific investment product recommendations will not be offered. The services offered will depend on the accountant s specific knowledge and area of specialisation. Each year a qualified accountant must audit the fund. An auditor must also ensure that the fund meets the legal and compliance obligations. The auditor must be independent. An accountant cannot be both auditor and adviser or administrator to the fund. Fund administrators offer crucial assistance in managing the many compliance and administrative tasks associated with SMSFs. These include recording and reconciling all fund and member transactions, lodging all necessary returns, providing annual accounts for the auditor and generating member statements. Solicitors may be required when it comes to drafting trust deeds and other fund documentation, as well as when seeking estate planning advice. Stockbrokers can buy, sell and manage any stocks which form part of the SMSF s investment strategy. They may also offer advice on stock selection. This above all: to thine own self be true. William Shakespeare ( ), 'Hamlet,' Act I, Scene iii 19

22 Want more information? Consult your financial adviser or accountant if you would like more information on the best approach for you. If you would like more information on the Macquarie CMT, or any of the other Macquarie solutions mentioned in this brochure, go to call or speak to your financial adviser. For general information on SMSFs, refer to the ATO website at or the ASX website at The Australian Prudential Regulation Authority (APRA) produces quarterly statistics and other valuable information on all forms of superannuation. This information is available at For further information about any of the services mentioned please speak to your adviser or visit 20

23 Just trust yourself, then you will know how to live. Goethe ( ), Faust 21

24 If you have any questions or require more information, we recommend you speak to your financial adviser Ask Macquarie Macquarie Investment Management Limited PO Box 192 Australia Square NSW 1215 BKL /07