SMSF costs can add up

Cost is another important consideration. Many Australians assume an SMSF will save them money or generate better returns. However, ASIC found numerous examples where SMSFs were not cost-effective compared with existing super arrangements, even for balances ranging to more than $1.5 million. Establishment costs, administration fees, audit expenses and ongoing advice costs can reduce the benefits of SMSFs.

Protections you may give up

There are also trade-offs that are often overlooked. When you move from a large APRA-regulated super fund to an SMSF, you may lose access to protections available in larger funds, including prudential oversight by regulators (such as APRA) and external dispute resolution through the Australian Financial Complaints Authority (AFCA).

More investment choice without an SMSF

Importantly, many of the features people seek from an SMSF may already be available through some large super funds. For example, member-directed investment options can provide greater investment choice without requiring members to take on the responsibilities and compliance burden of running their own fund.

Is an SMSF right for you?

An SMSF can work well for some Australians, particularly those who have the knowledge, time and commitment to manage one effectively. But for many people, a professionally managed super fund may offer a simpler, lower-maintenance and potentially more cost-effective path to retirement. Before making any decision, it's important to carefully weigh the benefits, responsibilities, costs and risks involved.

Why an SMSF may not be the best choice for many Australians