Starting an SMSF: A simple guide from decision to first trade

Starting an SMSF: A simple guide from decision to first trade

This information is general in nature and does not take into account your objectives, financial situation or needs. Consider whether it is appropriate for you.” 

If you’ve worked through whether an SMSF is right for you and decided to take the leap, the next part is what setting one up actually looks like. SMSFs have a reputation for being complicated, but getting started is more straightforward than most people expect, particularly if you work with a specialist administrator who handles the technical heavy lifting.

This guide walks through what happens between the decision to start an SMSF and making your first trade in the fund. We’ll cover the structural decisions, the legal and administrative setup, and how to get your money into the fund and ready to invest.

Before you get started 

Three decisions worth making before you begin the formal setup process.

Who will be a member of the fund? SMSFs can have up to six members, but most have one or two. If you’re setting up as a couple, both partners can be members. Families can include adult children. Each member is generally also a trustee (or a director of the corporate trustee) and has equal legal responsibility for the fund. One nuance worth flagging is that a single-member fund still needs either two individual trustees or a corporate trustee structure, 

What trustee structure will you use? This is the biggest structural decision. You can choose between individual trustees (each member is a trustee personally) or a corporate trustee (a company acts as trustee, with members as directors). According to the ATO, roughly 70% of new SMSFs choose the corporate structure because it offers cleaner governance, easier handling of membership changes, and better separation between personal and fund assets. 

Are you ready to take on trustee responsibilities? Setting up an SMSF means signing the ATO’s trustee declaration and accepting legal responsibility for the fund’s compliance. This is non-negotiable and important to understand before you commit.

The setup phase

Once you’ve made those decisions, the formal setup process kicks in. With a specialist administrator like Intello, this typically takes 24 to 48 hours (with ATO registration and bank account setup subject to standard processing times) and includes:

Establishing the trust and trust deed. Your SMSF is a trust, which means it needs a legal trust deed setting out the rules and conditions of how the fund operates. Your administrator prepares this for you.

Appointing trustees and signing the ATO trustee declaration. Each trustee or director needs to sign the ATO’s declaration confirming they understand their responsibilities.

Registering with the ATO. Your fund needs an Australian Business Number (ABN) and a Tax File Number (TFN), and must be registered as a regulated SMSF to access superannuation tax concessions. This is done through the ATO’s registration process, which your administrator manages.

Setting up a dedicated bank account. Your SMSF needs its own bank account to receive contributions, rollovers, and investment income, and to pay expenses. Fund assets must be kept entirely separate from personal assets, and this account is where that starts.

Getting an Electronic Service Address (ESA). To receive contributions and rollovers from other super funds, your SMSF needs an ESA. Your administrator sets this up.

Creating your investment strategy. Every SMSF needs a documented strategy that considers risk, diversification, liquidity, and how the fund will meet member benefits over time.  This is the blueprint for how your fund will actually be run, and it needs to be reviewed regularly as your circumstances and markets evolve. If you want a deeper read on what goes into building one, eToro’s guide to defining your SMSF investment strategy covers the key considerations in detail. 

Your ongoing trustee responsibilities

Setup is the start, not the finish. Once your SMSF is established, there are a handful of responsibilities that continue every year for as long as the fund operates. Most are handled by your administrator, but the legal responsibility sits with the trustees.

Records and reporting. Every contribution, rollover, trade, and expense needs to be recorded and kept on file (the ATO expects key records to be retained for up to 10 years). Each year, the fund’s financial accounts must be prepared, independently audited, and lodged as an annual return with the ATO. Intello can assist with all of this as part of ongoing administration.

Compliance with super laws. Super and tax law changes regularly, and trustees are responsible for ensuring the fund stays compliant. Again, Intello can assist with this, but trustees should still expect to stay informed on changes that affect their fund.

That’s the legal and administrative foundation. With the right setup partner, you don’t need to manage any of this directly. Your job is to make the decisions, sign the documents, and prepare to start investing.

The steps to making your first investment 

Once your SMSF is registered and your bank account is live, you can start moving money into it. There are two main ways:

Rolling over your existing super. Most new SMSF members fund the initial balance by rolling over some or all of their balance from an existing retail or industry super fund. This is a standard process and your administrator will guide you through it.

Making contributions. You can also make concessional (pre-tax) and non-concessional (after-tax) contributions, subject to the annual caps. Many trustees combine a rollover with ongoing contributions to build the fund balance over time.

Once your money is in the SMSF bank account, the final step is to open an investment account in the fund’s name and transfer funds to start investing. This is where eToro comes in. Our SMSF account gives you access to 400+ Australian stocks and ETFs, 10,000+ global stocks and ETFs across 20+ exchanges, and crypto, all in one account. 

Ready to get started?

Already have an SMSF? Eligible SMSF clients can earn up to USD$30,000 cashback on net deposits (new customers only; a minimum USD$10,000 deposit is required to open an eToro SMSF account, with terms and conditions applying).

Book a call with the team to discuss the next steps of taking control of your retirement. 

Don’t have an SMSF yet? eToro has partnered with Intello, one of Australia’s leading SMSF administrators, to offer eToro clients a discounted setup fee of A$990 and  up to 20% of administration and account fees based on your eToro Club tier. 

This guide has been put together with insights from Intello.com.au

 

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