Self managed super funds (also sometimes referred to as DIY super funds, or self managed superannuation funds), is a fund that you manage yourself granting the user more control and flexibility than the alternatives such as using an independently managed superannuation fund. There are several points that must be met for these funds. First of all the trust deed must meet the requirements of one 'Superannuation Industry Supervision Act' which was set up in 1993 (sometimes referred to as a SIS act). It must have four or less members, and each member of the fund must be a trustee. Another rule here is that no members of the fund must be employed by other members of the fund (with an exception for those members who are also related), and none of those trustees must receive any financial reward for their services towards the fund.
These self managed funds will otherwise perform the same role as the independently managed funds. Here by investing contributions the members make them available to the fund - of course as there are multiple investors this creates more capital for the group than one individual could obtain on their own meaning greater returns. The money donated into the group is then returned to the members upon their retirement along with the interest made on their investments. What is different however is that the members here are also the trustees and can then control where the money is invested and how it is increased. This has many benefits for those who are happy to put in the extra time and effort. For example it means that the trustees can feel safe in the knowledge that they are investing the cash themselves - that way they have full control and they can feel as though their profits are in their hands. This way they don't have to worry that their money will be invested poorly without their consultation and end up lost as a result. This also gives the trustees more flexibility - as they are running the fund they can decide on how much and when they contribute etc, as well as the nature of the industries they invest in. Finally some people will also actually enjoy having this kind of involvement in their finances, and can also feel a sense of satisfaction from it.
However there are is also a lot more responsibility on the part of the trustees. For example they must ensure to invest the money wisely, and each of them will be responsible for the success of everyone's investments. At the same time they will have to ensure the fund complies with the law, keep their records at all times in case these need to be checked over, ensuring the funds are in the correct names and informing the authorities of any changes, working together as a group.
This all makes these funds particularly suited to particular groups. For example younger individuals whose balance will likely be slightly lower, those who are over seven years away from retiring and those who are a little closer to retirement (but no less than three years). This opens the super funds up to a large number of people who can benefit from all of the flexibility and security, but also the education gained from self managed funds.