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Ask Paul: We have an SMSF but we're afraid to invest in shares

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Q. We have an SMSF and have been reluctant to invest in the stock market.

We actually don't know how to get started in investing.

Are there simple guidelines to follow and what percentage of funds would you suggest to invest? - Rob

ask paul clitheroe smsf

A. Goodness, Rob, what on earth are you doing with an SMSF?

It seems to me you must be holding cash investments, earning little interest and paying big fees to run your fund!

The whole idea of a self-managed super fund is to self-manage your investments.

As you are not confident to invest in key assets for a super fund, such as shares, my answer would be for you to use a managed super fund.

But then you pay manager fees and your SMSF accounting, lodgement and audit fees, basically doubling up.

You could easily do a course through the stock exchange and you may find that a lot of fun. Equally, you could go to an online company and go over its free information, subscribe for research or use its low-cost share investment funds.

But I think you should consider closing your SMSF and rolling the funds into a low-cost super fund where the manager does all the work for you. A couple of options, among many, would be Hostplus and AustralianSuper.

If you go this way, take advice to make sure you do the switch correctly.

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Paul Clitheroe AM is the founder of Money and serves as the publication's editorial adviser. One of Australia's most trusted personal finance experts, Paul has spent decades helping Australians build wealth, manage debt and make smarter money decisions. He is widely known for host­ing the Money TV program and authoring best-selling personal finance books. Since launching Money in 1999, he has played a leading role in delivering practical, independent financial guidance to Australians. Paul is chair of InvestSMART Financial Services. He was the founding chair of Ecstra Foundation, a national not-for-profit focused on improving financial wellbeing, from 2018 to 2026, and led the Australian Government's Financial Literacy Board and Financial Literacy Australia from 2004 to 2019. In academia, Paul is chair in financial literacy at Macquarie University, where he is also a Professor in the School of Business and Economics. Ask Paul your money question. Due to volume, Paul cannot respond to questions posted in the comments section.