The SMSF sector has experienced rapid growth over the past two years, driven by Australians seeking greater control, higher engagement and more personalised retirement outcomes.
SMSF Association CEO Peter Burgess told delegates at the SMSF Association’s National Conference Thought Leadership Breakfast in Adelaide that successive years of near-record growth suggest more than a temporary spike.
“Successive years of near record growth is highly unusual, it suggests structural change is underway with more people seeking greater control, higher engagement and more personalised outcomes,” Mr Burgess said.
According to Class data, consistent with ATO figures, four out of five new SMSFs are now being established without financial advice.
Class data on financial advice fees associated with established SMSFs shows 80 per cent were established without advice in FY25, up from 79 percent in FY24 and 78 percent in FY23.
Class CEO Tim Steele said, “Financial advice can deliver significant value for trustees across strategy, asset allocation, insurance and estate planning. Given the average SMSF is established for 15.6 years, there is a clear opportunity for advisers to support trustees’ evolving needs over the life of the fund.”
Managing Director of Heffron Consulting, Meg Heffron, said younger Australians now reach affordability thresholds for SMSFs much earlier than previous generations.
Younger clients have far more in super today than their equivalents did 30 years ago and the cost of having an SMSF is coming down. So they’re reaching the stage where SMSFs are affordable earlier than their parents had,” she said.
“Paradoxically, the SMSF itself is becoming affordable before they can afford advice – so people are evaluating and making that choice before engaging advisers.”
She added that even those who do explore advice find that advisers are increasingly reluctant to recommend SMSFs
Advisers are less willing to recommend SMSFs. While that sometimes makes perfect sense – because retail super platforms are continuously becoming more competitive, there’s also a significant reluctance because it has been made too onerous for them by regulatory and licensee pressure.
“These settings encourage advisers to present SMSFs as a last choice approach.”
At the same time, many trustees have grown up in the digital age.
“They’ve grown up in an age of ‘if you want to know something, do your own research’ – and the internet gives them all sorts of ideas about super generally and SMSFs in particular,” Ms Heffron said. “They’re far more comfortable backing themselves with something as important as their retirement savings on their own than previous generations might have been.”
Founder and Director of Easy Super, Natalia Clack, said most prospective SMSF trustees are not actively seeking financial advice.
“Typically aged between 35 and 55, they want greater control over their superannuation and financial future but are not inclined to pay for advice,” she said.
“Many are also interested in investing in alternative asset classes such as cryptocurrency, precious metals and private debt.”
Class data shows that while fewer than 3.5 per cent of the more than 21,000 funds established over FY23–FY25 held cryptocurrency, 381 of those funds had between 81 and 100 per cent of their assets invested in crypto.
The concentration risk has prompted debate about whether this represents a unique vulnerability within the sector.
Financial Services Council CEO, Blake Briggs warned against excessive exposure to individual asset classes.
“Maximising investment returns over the medium to long term for retirement is a specialist skill. A little knowledge can be a dangerous thing,” Mr Briggs said.
Ms Clack added that the key issue is not necessarily whether trustees receive formal advice, but whether they are properly educated.
“Not every trustee needs financial advice, what matters most is access to high-quality education, clear guidance on compliance obligations, and an understanding of the risks and opportunities involved,”
Ms Heffron cautioned that trustees operating without advice may fail to fully utilise the benefits of an SMSF.
“The biggest risk for the trustee in operating without advice is that they’ll miss out on some of the things they’re effectively buying by having an SMSF because they don’t know how to use it – they won’t set up insurance, won’t use strategic opportunities and may pay unnecessary tax,” she said.
The panellists agreed the greatest threat is not widespread compliance failures that would “blow up” the sector, but rather SMSF members failing to realise the full potential of their fund.
Mr Burgess maintained that professional advice remains critical, even if it is not the starting point for many trustees.
“Whether they are advised or unadvised, it’s making an informed decision that matters. One way – and we would argue the best way – is to seek advice from an SMSF specialist. But it’s not the only way,” he said.
“The opportunities for specialist advisers are enormous,” Mr Burgess said, adding the SMSF sector is spawning a whole new generation of highly engaged and astute investors who may be unadvised today, but who will gravitate to advice over time.
“But with an advice framework that is not fit for purpose, and the rising cost of advice, we risk stifling these opportunities.”
Ms Heffron agreed it is not surprising that many begin without advice.
“Ideally, they would come to advice at some point in their journey, but it’s not a surprise or necessarily a problem that they start without it. The important thing is that they know their own limitations,” she said.
Looking ahead, Mr Briggs urged the sector to take a proactive stance.
“The SMSF sector needs to get ahead of the regulatory debate and advocate for policy settings that will ensure confidence in the industry and facilitate good consumer outcomes – and not wait for this to be determined by external forces” he said.