Should I start my own SMSF?

If you're asking that question of your own volition, the answer is probably 'yes'. I say that because having an interest in taking control of your super is half the battle.

Industry and retail super funds promote the idea of a 'minimum balance' but you really don't need as much as their marketing departments would like you to think. Technology is rapidly eating away at administration costs – you can now run a SMSF for less than $1,000 per annum through an online provider – so if you've got $100,000 or thereabouts you're in the game.

Before these new services, the minimum required balance was probably at least twice that. Mind you, if you're planning substantial contributions in the next few years, the current balance isn't that important.

SMSFs are about taking control of your investing and improving returns, since many external funds have been guilty of delivering average, or below average, performance at above average cost. So if you've got the commitment and a balance of $100,000 or thereabouts, that's a good start.

The upcoming pension changes (see Age pensions and super income streams: Lifting the fog - Part 2) only add to the argument. If your age pension payment depends on the calculation under the current 'income test' then it might be expensive to take a new super pension after 1 January next year.

If you're receiving a 'big bank super fund' pension and the fund's performance takes a turn for the worse, you're stuck between a rock and a hard place. You either cop the poor returns, or switch managers and lose some, or all, of your age pension (the change in super pension cause the new, harsher 'income test' to kick in).

An SMSF allows you to change investments, or fund managers, without cancelling your pension. You don't have to trade-off performance for age pension entitlement. It's another item to add to the list of advantages SMSFs have over their industry and retail fund competitors.

But it's not all roses and rainbows. SMSFs can deliver poor outcomes to those who abdicate all responsibility (at a substantial cost), get stitched up with poor in-house products or take excessive risks. If you're a homeowner with a mortgage and thinking of setting up a SMSF to leverage into residential property, you might be better off sticking with a basic industry fund.

It's why taking an interest, and educating yourself, is so crucial to whether you'll make an SMSF a success. This factor alone is just as important as your current super balance. Advisor fees can cruel a small super account and taking on too much risk can blow your super to smithereens before you get a chance to perform.

If you're taking a shot at running a SMSF always err on the side of being too conservative. Losing out on extra returns due to holding 'too much' cash is small change compared to investing a large proportion of your fund in ABC Learning, or a property with structural defects. There'll always be another opportunity to invest, unless you've got nothing left to invest with.

Should you start an SMSF? Possibly. If you've taken the time to understand your responsibilities as a trustee, the costs involved and how you're going to invest, give it a shot.