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Click here to download the SMSF application form
A new generation of investors
A recent survey of young Australians found that attitudes towards investing for the future have evolved. The next generation of Aussies want more control of their investments, and with good reason: many believe they can get a better average return by managing their own super than with a traditional superannuation fund.
Why did you set up your SMSF?
1. I wanted to gain control of my investments
2. I am self-employed and needed a flexible option
3. I wanted to use my SMSF to invest in the future
4. I wanted to minimise fees and super fund menegment costs
5. I wanted to offset and minimise my taxes
6. I don’t trust superannuation funds
7. I believe I can get a better average return managing my own super then with the average super fund
8. I believe it’s important to plan ahead for retirement
How does an SMSF work?
Unlike a retail or industry super fund, a self-managed super fund puts you in the driver’s seat. You decide how much to contribute, where you want to invest and the type of insurance you want.
The benefits of an SMSF account on eToro
eToro’s platform was designed to be simple for anyone to navigate — even if you’ve never held your own investment account before.
Top trading tools
More advanced investors will find everything they need too, from pro charts to risk management tools to in-depth research and analysis and more.
Invest in US stocks, crypto, commodities, foreign currencies, or a mix of all of the above… eToro gives you all of these options, in one portfolio.
Support and community
The collective wisdom of millions of investors is at your fingertips on the world’s leading social investing platform.
Join the eToro Club and earn interest on your cash balance.
Self-managed doesn’t mean alone
We understand that just because you want more control, that doesn’t mean you won’t need support for your eToro SMSF account. Not only is our dedicated Customer Service team here for you — you also have 24/7 access to an entire online community of investors from Australia and around the world.
Smarter investing, without the management fees
eToro’s Smart Portfolios offer ready-made, diversified exposure to top market segments and are an excellent option for any long-term investor looking for a passive investment approach —– with no management fees or hidden charges. Learn more about eToro’s Smart Portfolios here.
Get started today!
If you do not yet have an SMSF but want to start investing as one via eToro, refer to the Australian government’s Money Smart Guide for more information about whether an SMSF is right for you. If you have an SMSF and would like to open an account with eToro, you can begin your application process right away.
Simply leave your details and an Account Manager will get in touch to assist you.
A self-managed super fund, or SMSF, is a way of saving for your retirement. Also known as DIY super, it is a private super fund that you manage yourself, in which you are responsible for making all relevant investment decisions.
The difference between an SMSF and other types of funds is that the members of an SMSF are also the trustees. As trustee of your SMSF, you manage your own super fund, rather than having a bank or fund manager make all of the investment decisions for you.
You can usually have up to six members in a fund and almost all Australian residents can apply to set up their own SMSF. To be an SMSF member, you generally must:
- Be at least 18 years old
- Be financially solvent
- Consent to being a member or trustee of the fund
- Accept the fund’s responsibilities by signing a Trustee Declaration
- Have no criminal convictions relating to dishonest behaviour
- Have never breached the Superannuation Industry (Supervision) Act 1993 or been disqualified by SMSF regulators
- Not breach the sole purpose test
Some of the benefits of a self-managed super fund are:
- Flexibility. You have the flexibility to make decisions according to fluctuations in the market — and timing is critical when it comes to investing. Investing in stocks in Australia gives you greater control over your investments, so you can track their performance and adjust your investments accordingly.
- Diversification. You have the freedom to choose from a range of investments, industries and asset classes. From stocks in Australian securities to investing in cryptocurrencies, it can be a good idea to diversify your retirement portfolio to help reduce the risks associated with individual stocks. Be sure to do your research before deciding which asset types are right for you.
- Liquidity. A self-managed super fund lets you exit a stock at a time that suits you. Plus, most shares can be sold quickly.
- Assistance. You may have control over your super and be responsible for its financial and legal obligations, but that doesn’t mean you can’t seek professional advice. Consider speaking to an independent financial advisor to make the most of your SMSF.
- Tax credit. Because it is a retirement fund, your SMSF will only pay a flat 15% tax rate. Income from shares generally comes with a 30% tax credit, so you can claim back the difference.
- Tax savings. Super funds generally do not pay tax on all capital gains. That means once you have held an investment for over one year, only two-thirds of the gain is taxable. Over time, this could help you significantly increase your investment gains and help build your overall wealth.
As an SMSF trustee, you are responsible for making all investment decisions for your fund. SMSFs also have legal administrative obligations that require you to maintain records, provide financial statements, complete a tax return and organise an independent audit.
Some risks may include:
- You are personally liable for all of the fund’s decisions — even if you get help from a professional, or if another member made the decision.
- Your investments may not bring the returns you expect.
You are responsible for managing the fund even if your circumstances change — for example, if you lose your job.
- There may be a negative impact on your SMSF if there is a relationship breakdown between members, or if a member dies or becomes ill.
- If you lose money through theft or fraud, you won’t have access to any special compensation schemes or to the Australian Financial Complaints Authority (AFCA).
- You could lose insurance if you’re moving from an industry or retail super fund to an SMSF.
Setting up an SMSF generally costs between $300–$800 AUD. In addition, there are annual auditing fees which can cost $1,000 AUD or more, depending on whose services you employ.
Holders of SMSFs pay tax at a rate of 15% rather than your marginal tax rate of tax.
It is legally possible to have multiple SMSFs. However, bear in mind that additional fees for each fund would be incurred.
Any net capital gain made through your SMSF will be included in your SMSF’s assessable income. SMSFs have a flat tax rate of 15%. Complying SMSFs are entitled to a CGT discount of 1/3 if the relevant asset has been owned for at least a year.
There are three steps to the SMSF application, which we will guide you through:
- Fill out the SMSF application form
- Fill out the IRS series form according to the SMSF and Corporate Trustee (if applicable)
- Fill out the IRS series form according to individual Trustees/Directors of a Corporate Trustee (if applicable)
Note: if we cannot electronically verify a party, we would request Proof of Identification and Proof of Address.
In order to comply with CRS & FATCA regulations, we require all clients to provide information including tax residency and tax file numbers (TFN’s) and in the case of SMSF clients, the classification of the SMSF under both regulations. eToro is also required to collect appropriate IRS W-Series forms. This information is to be provided at the time of the account opening and accuracy must be maintained for the duration of your account with us.
Please note that eToro cannot advise you on the appropriate W form to sign and you will need to do a self-assessment and confirm your tax status yourself.
Please see the links below for the appropriate forms and instructions:
Form W-8BEN-E and instructions can be found here: https://www.irs.gov/forms-pubs/about-form-w-8-ben-e
Form W-8BEN and instructions can be found here: https://www.irs.gov/forms-pubs/about-form-w-8-ben
Form W-9 and instructions are available here: https://www.irs.gov/forms-pubs/about-form-w-9