SMSF Research

The SMSF Association has engaged Rice Warner and The University of Adelaide to explore the size at which a self managed super fund (SMSF) becomes a viable option for an individual in terms of cost effectiveness and investment performance.

The research findings establish a new threshold at with SMSFs become competitive with Retail & Industry funds, showing that for suitable individuals, an SMSF can be a viable option for those with lower superannuation balances than previously thought.

Although SMSFs are not for everyone, this research is good news for individuals wanting more control over how their super savings are managed and invested. For individuals who have the time and expertise to manage their own super fund, this research suggests SMSFs with balances of $200,000 or more are cost effective and can achieve comparable returns with much larger funds.

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The SMSF Association retained Rice Warner to update its report prepared for the Australian Securities and Investments Commission (ASIC) in May 2013 ‘Cost of Operating SMSFs‘ in the context of ongoing public debate regarding the appropriate minimum size for a Self Managed Superannuation Fund (SMSF) and ASIC advice regarding fees paid by SMSF Trustees.

The research establishes the size at which a fund becomes viable and then assess implications for funds which are below this threshold.

The analysis for the 2013 report was based on the statutory costs and fee structures for SMSF service providers in comparison to the fee structures of APRA-regulated funds. The analyses were therefore based on potential fees. This analysis has been repeated.

For this report, Rice Warner has also been given access to anonymised expense, cash flow and balance information for approximately 100,000 SMSFs. This has allowed them to consider actual costs incurred.


Cost of Operating SMSFs

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Understanding Self-Managed Super Fund Performance

Historically, comparisons between SMSFs and APRA funds have been difficult to make, due to the different formulas applied to measure their performance and the different methods used to calculate the data. 

This research study overcomes many of these differences by using SMSF financial statement data (rather than data from SMSF Annual Returns) and a calculation methodology which is directly comparable with the way APRA calculates returns for APRA regulated funds. It provides a more realistic picture of the minimum capital required for an SMSF to achieve comparable investment returns with much larger funds, and how a diversified asset allocation can contribute to overall performance.

The research data revealed no material differences in performance patterns for SMSFs between $200,000 and $500,000, so the notion that smaller SMSFs in this range deliver materially lower investment returns, on average, than larger SMSFs in this range, is not supported by the research results.


Understanding Self-Managed Super Fund Performance​

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Cost of Operating SMSFs

Understanding Self-Managed Super Fund Performance

About the SMSF Association

The SMSF Association is the leading authoritative voice for the self managed superannuation (SMSF) fund sector, established to improve the quality of advisors, the knowledge of trustees and the credibility and health of a vibrant SMSF community. 

The Association’s core beliefs embrace every Australian having the right to a good quality of life in retirement and having the right to control their own destiny.

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