Self managed super funds (SMSF) are one in which up to four people pool their superannuation for investment purposes. This gives them the opportunity to invest in a wider variety or resources than only one. Each person must become a trustee or directors of the fund. SMSFs are strictly regulated by the Superannuation Industry (Supervision) Act and Regulations (SIS) and the Australian Tax Office (ATO).
Some people like to have an SMSF because it gives them the flexibility to choose their own type of investment strategy, because they are in control and they have the flexibility to arrange everything to suit themselves. When properly set up, the fund can invest in a great diversity of products from property to art to online savings accounts.
If your SMSF complies with all the rules and regulations of SIS and ATO, a concessional tax of only 15% applies. The rules? There must be no borrowing to invest, and financial assistance to members or relatives is prohibited. Any assets acquired must not belong to members or relatives. It must meet the sole purpose test and document an investment strategy. The sole purpose test is that the fund exists to provide retirement benefits to its members.
In fact, while there are benefits to owning a SMSF, there are so many rules and regulations to which you must comply that many people use a specialist SMSF administrator - that costs extra, of course if you want to go beyond simple DIY investment such as term deposits and the like.