Could you please explain the difference between an SMSF and a large public super fund, and which might be better to set up? What are the main advantages and disadvantages of each? For example, how would this apply to a couple – a 45-year-old and his wife with $300,000 in a large public super fund.

A SMSF (self-managed super fund) is one where you, as trustee, make all the decisions about how the money is invested and managed. A large public super fund, by contrast, is run by professionals, with your money pooled alongside thousands of other members.

The idea of running your own super fund can be alluring, but much of the time, it’s wiser to leave it to the professionals.Credit: Simon Letch

The attraction of an SMSF is flexibility. You can invest in almost anything, including property, shares and unlisted assets but with that flexibility comes cost and responsibility.

Every SMSF must be audited annually and comply with strict rules, and trustees are personally liable if things go wrong. Unless balances are well above $500,000, and ideally closer to $1 million, the costs and workload often outweigh the benefits.

Large public super funds are the opposite. They are inexpensive, well regulated and offer broad diversification. You also get automatic access to insurance and don’t have to worry about compliance.

The trade-off is limited flexibility – you can’t buy individual properties or unlisted assets, but this isn’t an issue for most people. Unless you are an experienced investor with a fairly big........

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