Independent Reserve SMSF Services

Introducing the concept of SMSFs and their growing popularity among investors

Self-managed superannuation funds (SMSFs) have been a preference for sophisticated investors who need flexibility and control over their retirement savings. These investors are attracted to SMSFs because they can empower individuals to shape their financial destiny with autonomy.

In recent years, SMSF investors have been attracted by the emergence of cryptocurrencies. A recent report shows Australian SMSF investors have significantly embraced cryptocurrencies, allocating funds worth AU$1.5 billion into virtual currencies.

• How does the Independent Reserve support SMSF investments, making it easier for users to include cryptocurrency in their retirement portfolios?

In 2024, many SMSF investors are looking for an avenue to purchase Bitcoin and other cryptocurrencies to boost their funds’ returns. The most common way is through a reputable, easy-to-use, trusted, and registered crypto exchange.

Independent Reserve makes purchasing Bitcoin and cryptocurrencies simple with SMSFs. Thousands of SMSF investors use Australia’s oldest crypto exchange to get exposure to the world’s quickest-rising investment instrument (cryptocurrency).

Overview of SMSF and Cryptocurrency

• What is an SMSF, and why are more investors considering adding cryptocurrency to their retirement funds?

Self-managed superannuation funds (SMSF) are private super funds that individuals (or family members) can manage to provide future retirement benefits.

It is a trust where funds or assets are held and managed by an individual or on behalf of a maximum of six individuals. All members are trustees responsible for investment decisions and compliance with the super fund and tax law.

SMSFs enable individuals to invest in cryptocurrency through their retirement fund, among other assets.

An SMSF is a retirement pension managed by an individual or individuals rather than a fund manager. This fund typically comprises a broader range of assets as it is not restricted by fund managers, who usually approve a list of investments of a particular vehicle. Think of any assets, including property, artwork, vintage wine, or cryptocurrency that can be part of an SMSF. The components of the basket depend on the preference of an individual or individuals.

It is entirely legal for people to add cryptocurrencies to their self-managed super funds. However, there are multiple compliance requirements that you must meet when operating an SMSF, including tax reporting and adhering to the fund’s investment objectives. Failure to adhere to these requirements can result in fines or even imprisonment.

• What are the potential benefits and risks of investing in cryptocurrency through an SMSF?

Here are the key benefits of including crypto in your SMSF portfolio. 

Diversification: Diversification has been the core investment strategy for financial investors to grow their portfolios in the context of the SMSFs. In the era of cryptocurrencies, it is logical for users to incorporate crypto into their SMSFs to stabilize the returns of their portfolios.

Ability to generate high returns: Since its establishment, Bitcoin has received increased user attention for its remarkable surge. Although previous performance does not guarantee future outcomes, Bitcoin has illustrated the ability to generate incredible returns, which can build up the gains of your SMSF.

Protection against inflation: Bitcoin has displayed some independence from conventional financial markets affected by inflation. During periods of increased inflation or economic turmoil, Bitcoin may function as a hedge, helping to diversify investment risks facing your SMSFs. But with the introduction with Bitcoin ETF’s this trend is weakening.

Risks: While cryptocurrencies have gained significant credibility, they are highly volatile and unpredictable. Therefore SMSF investors are advised to approach these assets with caution. That is the reason why most SMSF users stick with major cryptocurrencies (like Bitcoin, Ethereum, Solana, and Cardano), as they are lesser volatile and have higher potential for giving greater returns than others.

Most SMSF investors prefer the top four cryptocurrencies, and add them to their portfolios through tools like the popular Australian crypto exchange Independent Reserve.

Independent Reserve’s SMSF Features

Independent Reserve is a trusted and regulated cryptocurrency exchange that offers direct access to investors wanting to purchase Bitcoin and over 25+ other popular cryptocurrencies.

Why Independent Reserve stands out for SMSF crypto investing:

• SMSF compatibility: Independent Reserve simplified SMSF crypto investing for SMSF customers, adding several features designed to specifically cater to the needs of SMSFs.
• Reliable and secure: Independent Reserve is Australia’s oldest cryptocurrency exchange with industry-leading account security. The platform is duly registered by AUSTRAC and Singapore’s MAS.
• Low fees: Independent Reserve has attractive trading fees, making it a top choice for SMSF crypto investing. Fees start at 0.5% but decrease to 0.02% based on the user’s 30-day trading activity.
• 24/7 access: Buy or sell crypto is 24/7 securely accessed on desktop and mobile apps.
• 100% compliant: Independent Reserve is a fully regulated exchange, with multiple offices across international countries mainly in Europe, Asia, and North America.
• Portfolio tracking: Independent Reserve is a user-friendly interface, with an intelligent, cloud-based SMSF software for investors to effectively manage the administration of their self-managed superannuation funds.
• Simple EOFY reporting: The platform’s tax tool simplifies tax calculations, tracks your gains, and generates tax forms for free. Its integrated KPMG tax estimator and various tools offer easy tax reporting for your trades and transactions.
• Over-the-counter service: Independent Reserve’s OTC desk provides personalized support for your crypto trading needs, acting as a two-way bridge between traditional fiat and crypto markets. The OTC desk is especially important for high-volume traders.
• 24/7 Customer support: Their friendly and experienced SMSF support team is there is help. They are available 24/7. Whether you’re a professional or beginner investor, if you need assistance, their dedicated team is available to help you 24/7.

How to set up an SMSF Account on Independent Reserve?

If you are contemplating investing in crypto through your SMSF, here are crucial steps to enable you to do so.

1. Review and Update Your SMSF Trust Deed

If you are establishing your SMSF for the first time, it is important to know that the process involves multiple significant steps. The good news is that you can manage the process independently. Otherwise, you can consult the Independent Reserve expert team who specialize in SMSF setup to help you.

The first crucial step is to assess your SMSF trust deed. This is significant whether you are creating a new SMSF or have an existing one. The Trust Deed is the cornerstone of your fund, highlighting its structure and investment guidelines.

If you are establishing a new SMSF, make sure that the trust deed includes provisions for crypto investments. For investors with an existing SMSF, check if the existing deed includes such investments. If it’s outdated or doesn’t allow for crypto investments, you will need to update it. Most modern trust deeds are designed to be wide enough to cover investments like cryptocurrency. However here is what to check:

Sole purpose test: The deed needs to clearly state the key purpose of your SMSF, which is to offer retirement benefits to its members.

Trustee details: The trust deed should mention the trustees, and their powers, and prove that they have been appointed according to stipulated regulations. Trustees must always act for the benefit of the SMSF members.

Member Agreement and Responsibilities: All trustees and directors are expected to offer a written agreement and sign a Trustee declaration. The deed should mention all members of the SMSF, state the process for adding new members, and highlight their responsibilities and rights.

Crypto clause: Make sure that the deed explicitly allows cryptocurrency investments, either directly or under a broad investment clause.

2. Include crypto in your SMSF investment strategy

The next step is to create a clear investment strategy. This strategy must integrate cryptocurrency as part of the included assets and align with your SMSF’s overall investment goals. Make sure that this strategy is documented, reflecting how cryptocurrency investments fit into the wider portfolio.

The SMSF’s investment strategy should be a living document, subjected to at least an annual review and updated to reflect changing members’ risk appetites and investment goals or shifting market conditions. This is important when putting into consideration of the diverse needs of different members.

3. Register your SMSF

To begin your SMSF, you need to officially register it with the tax authority. If your SMSF is managed by a company (corporate trustee), you’ll also need to register with the regulator in charge of the Securities and Investments Commission in your country.

There are many important steps to consider in this process:

•       Sign the Trust Deed: This document should be signed by hand to officially create your SMSF.
•       Register with the tax office: After your fund is established and the trustees are selected, your SMSF has to be registered with the tax office and applied for a Tax File Number for your SMSF.

Ensure your fund is a regulated SMSF by the tax office as this enables you to get tax concessions and claim deductions.

4. Open a Bank Account for Your SMSF

To manage your SMSF fund, you should open a bank account in the name of the SMSF. You will use this account to handle the fund’s operations, including obtaining contributions and income from investments

It is important to choose a reliable bank that provides services specifically for SMSF entities. This ensures that the account created aligns with SMSF requirements.

A separate bank account for the SMSF is important as it keeps the SMSF’s funds segregated from the personal accounts of its members.

5. Set up your Independent Reserve account

Once you’ve created a bank account for your SMSF, the next step is to create your Independent Reserve account to use to invest in cryptocurrency. This decision is important for managing your SMSF’s crypto investments effectively.

Independent Reserve is a duly registered crypto exchange. It sets itself apart in the global market with its outstanding SMSF services. Being a registered platform, it guarantees compliance with regulatory standards and provides accounts specifically designed for SMSFs. The platform facilitates easy management of audit and tax responsibilities, thanks to its integration with top-tier tax software provider, KPMG. 

This makes it a preferred platform for SMSF investors seeking to engage in crypto investments with their super funds.

Independent Reserve directly offers SMSF services, ensuring that your annual SMSF compliance is fully enforced and goes through its annual audit every year.

When you register with Independent Reserve, you will be asked to provide personal ID documents and a copy of your signed and implemented SMSF trust deed.

Once you submit the necessary documents and create an account on Independent Reserve, their verification team will take 24 hours to assess your application. You will get a support message if their verification team requires further clarification or documentation.

Once your SMSF account is fully verified and approved, you will receive a confirmation email and you’ll be able to deposit, trade, and withdraw. You now can transfer the funds from your SMSF bank account into the exchange and begin investing in cryptocurrency.

6. Store your crypto assets securely

You can choose to either store crypto on the exchange or an external hardware wallet. That will depend on the security preference of your SMSF. 

If you choose to store crypto on Independent Reserve, it is important to separate these assets from any personal holdings. This separation is vital for organization purposes and also crucial for audit transparency and compliance. It is also advisable to implement strict security measures, like regular backups and multifactor authentication, to safeguard your SMSF assets from potential theft and hacking.

If you opt for an external hardware wallet to keep your assets offline in cold storage for enhanced security, make sure to maintain clear documentation for SMSF audit purposes. Ensure that any hardware security purchases are invoiced to the SMSF and keep a copy of this tax invoice. It is important to use a wallet exclusively for the SMSF assets, without mixing with any personal investments. 

 Benefits of Using Independent Reserve for SMSF

• What are the advantages of using Independent Reserve for SMSF, including security, regulatory compliance, and customer support tailored to SMSF investors?

Independent Reserve is a popular choice for investing crypto into SMSFs. It has been assisting thousands of Self-Managed Super Funds to securely invest in cryptocurrencies since 2013.

Here are some of the key benefits that SMSF investors choose to invest in Independent Reserve.

SMSF compatibility: Independent Reserve has gone to great lengths to adapt and accommodate the demand for user-friendly SMSF crypto accounts. It has built a remarkable infrastructure that streamlines the SMSF onboarding process, compliance, and reporting of things, making the experience for SMSFs easy to manage and smooth.

Coin selection: Independent Reserve offers a selection of major cryptocurrencies that have greater potential for giving clients better returns than others. That is the reason why the exchange lists the top 30 cryptocurrencies to give clients the best opportunity for making money with crypto.  

Platform security: Independent Reserve is a trusted crypto exchange which duly registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC) and Singapore’s MAS (Monetary Authority of Singapore).

Independent Reserve has a KYC (know your customer) policy, which assists in maintaining the platform’s integrity. The platform enforces the 2-factor verification (2-FA), which is an identity and access management security technique that requires two forms of identification for users to access assets and data.

The company also has sophisticated multi-layered security, which is periodically updated to safeguard user assets from the latest hacks and threats.

The firm has full transparency of its location and the people who run the firm. The company also has a fund storage system that puts most funds in cold, offline storage.

Trading fees: Independent Reserve is completely transparent with its trading fees. Its fees start from 0.5% and decrease as user trading activity increases. The company decreases its fees based on a user’s 30-day trading activity. It is an exchange that investors can consider for SMSF investing as it has a clear table outlining its fees and spreads in comparison to other exchanges in the market.

Location of the exchange: For SMSFs, it’s essential to go for an exchange that operates (or has an office) in your country. Independent Reserve legally operates in several international countries. Its local operations enable it to simplify staying up to date with regulatory and legal changes, doing your cryptocurrency taxes at the end of the year, having access to reliable and high-quality customer support, and allowing customers to trade directly with major currencies like USD and others.

Customer support: The exchange provides a ticketing system to enable SMSF existing and new customers to access customer support whenever they want. Since the platform has SMSF compatibility, customers find it easy to get served in terms of queries about SMSFs. 

Real-Life Success Stories on using SMSFs

In the middle of 2017 when Bitcoin price hovered at around $3000, Mathew Paul, a retired employee, embraced a risk that significantly shaped its financial future. Mathew experimented with the cryptocurrency using some of his self-managed super fund (SMSF), a move that many people during that time considered risky.

Mathew was able to rejoice greatly at his tremendous returns after his investment technique functioned well despite the cryptocurrency’s inherent volatility.

Just like many other Australians, Mathew witnessed the potential of Bitcoin and other cryptocurrencies. The idea of virtual currency interested him, and he embraced the investment approach after conducting comprehensive research.

He sold some of his traditional superannuation savings in June 2017 and utilized the funds to purchase Bitcoin via Independent Reserve. He moved into a new financial landscape, and trusted his guts, hoping to step into a carrer for wealth.

It was not an easy journey. Wild price fluctuations of cryptocurrencies frighten any investor, but Mathew did not hesitate. Despite facing extreme volatility, his investment in Bitcoin proved to be a sound one as his funds appreciated significantly over time. He could never have understood the level of financial prosperity and satisfaction this growth offered him.

Mathew’s success story is part of a wider Australian trend as many retirees and investors are integrating crypto into their SMSFs. Individuals seeking to diversify their retirement investments know SMSFs as a suitable option due to their control and flexibility.

Mathew’s key element for success was his investment approach. He wrote an investment strategy that highlighted the objectives of his SMSF. Despite knowing the risks of cryptocurrency, he stuck with his investment plans which aligned with his retirement goals. He especially knew that cryptocurrency is a long-term investment game and the kind of coin investing into. He was not swayed by price volatility but stuck with his investment plans.

Conclusion   

Cryptocurrency is a rapidly growing asset class that is appealing to millions of investors. With more savvy investors seeking to grow their retirement funds with cryptocurrencies, Independent Reserve is here to help make it easy.

Their SMSF professional team is ready to help you every step of the way. Whether you have any questions or you’re ready to start, their team is more than delighted to assist.