Disadvantages

Responsibilities

• Operating rules and regulations need to be understood;

• Legislative changes require constant attention; and

• You must ensure the fund remains compliant to avoid penalties.

Administration

• Records must be kept scrupulously;

• Reporting has set requirements;

• You must understand your tax lodgment obligations;

• Are you prepared to be ‘hands-on’?

• Do you have time to devote to your fund? and

• Do you have the professional skills and technical knowledge to manage the fund?

Cost

• The fund needs a sufficient balance to be cost-effective (generally over $300,000)

• Insurance premiums can be higher than ‘large fund’ policies.