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


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.


Paul Clitheroe AM is a respected financial adviser and Money's founder and editorial adviser. He is chair of the Australian Government Financial Literacy Board, and author of several personal finance books. Click here to email Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section.
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