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The latest trends in SMSFs

To do it yourself or not, is often a question we hear when it comes to superannuation. There’s no right or wrong answer, it is an individual decision. When taking the step to set up an SMSF or to wind an existing SMSF down, it’s important to understand both the benefits and costs.

According to ASFA, as at June 2023, Self-Managed Super funds (SMSFs) accounted for just under 25% of total superannuation assets (listed in the below table as "Funds with less than 7 members"). There is undeniably a place for SMSFs and, for some, they can be the only way to hold certain assets within a superannuation environment. They suit people who want to be quite ‘hands on’ with their superannuation and who are comfortable with the level of responsibility that comes with a SMSF.

The issue of costs

The first thing most people want to know is the cost. The way in which fees and costs work within SMSFs is similar to other types of super but they tend to vary more. SMSF costs can include yearly independent audits, asset valuations, and legal fees if the fund deed needs amendments. Depending on the assets in the fund, as well as any professional financial and investment advice received by the trustees, the running costs can generally be between $1,500 and $10,000 per annum, and this may even be before the management costs of any underlying assets or investments.

In a managed super fund, the costs of running the fund and operating its investments are often pooled and spread across all the members, generally resulting in a lower ‘per head’ cost that is largely predictable.

Some people choose to take a hybrid approach where they have both a SMSF and a managed fund. If you choose this approach you’ll be paying fees on each, so you’d want to have a good reason to do this.

Who's responsible?

Another question is around responsibility - who is responsible for investment decisions and keeping the fund compliant (to avoid fines and other penalties). For an SMSF it’s the trustees, but the depth of expertise in these areas depends on the individuals involved and many trustees do need guidance.

In a managed super fund this is all taken care of. Managed super funds can invest at scale, keeping costs low while also opening investment opportunities not necessarily available to the average investor, for example exposure to unlisted assets like infrastructure that can be an attractive diversifier and well aligned to long-term investing, or niche investment strategies managed by experts. Members of managed funds can often choose from a wide range of investment options and still be very active in managing their investment strategy if they choose to.

Insurance and other issues

When it comes to insurances, the trustees of a SMSF are responsible for sourcing, updating and paying for their own personal insurance cover (death, disablement, income protection). Managed super funds offer group insurance policies that are typically very competitive with other offerings from insurers. Of course, rates do vary and can be influenced by the composition of the membership.

Having an SMSF does throw up other complexities, for example for a couple managing an SMSF, divorce and separation can present a raft of legal and financial issues to ensure ongoing trustee obligations are maintained, where superannuation arrangements can be simplified by transferring to a managed super fund. Also, if a trustee becomes ill or passes away, it could change the obligations and responsibilities of the remaining member/s, issues that are generally avoided by members of a managed fund.

Latest SMSF trends

At UniSuper we’ve seen trends emerging in those taking up and giving up SMSFs. The average age of UniSuper members rolling out to an SMSF is age 50, while the average age of our members who roll money in from an SMSF is age 62, and with an ageing population we are seeing more members rolling in from their own SMSF. Over time, the SMSF members’ financial goals and their desired level of involvement in managing investments may change or wane, or the original purpose for creating the SMSF may no longer be necessary, for example if the asset that it was specifically set up to own is no longer held within the fund. In our experience, some people start to ask if this is how they want to be spending their time.

As you can see, there’s a lot to think about if you are considering setting up or winding down an SMSF. The best bet is always to seek professional advice and understand the pros and cons of these options to set you up for the future you aspire to achieve.


Derek Gascoigne is State Manager Advice at UniSuper, a sponsor of Firstlinks. Please note that past performance isn’t an indicator of future performance. The information in this article is of a general nature and may include general advice. It doesn’t take into account your personal financial situation, needs or objectives. Before making any investment decision, you should consider your circumstances, the PDS and TMD relevant to you, and whether to consult a qualified financial adviser.

For more articles and papers from UniSuper, click here.


February 05, 2024

Over the past two years (to Jan 2024), my SMSF of $600k (primarily invested in cash assets) earned around 8% pa, compound. Whereas most "balanced" industry funds earned around 3.5% pa, compound. I was also able to access some secure wholesale investments as well. These are some reasons why SM Pension Funds are growing in number overall, including taking into account those funds being wound up closed (also for other logical reasons, including not having enough FUM to warrant the DIY cost).

February 04, 2024

Our experience may be worth consideration. For 20 years we ran a successful SMSF and as we aged we had been mulling over the options now and then. One option we ruled out pretty quickly was to bring adult kids on board. Then the decision was taken out of our hands - two years ago at ages 75 and 82, we were both diagnosed with advanced cancer within 4 weeks of each other. It took 3 months to wind up the fund and transfer to Unisuper. Fortunately it was a reasonably easy task as there were (deliberately) no illiquid assets. Our accountant was all we needed. So where are we now? My husband is in a nursing home with dementia, still battling prostate cancer, and I am in a 'watch and wait' holding pattern. Did we do the right thing? Certainly we did. The fees hurt but we have preserved the capital and simplified our finances for our kids.

John Mather
February 04, 2024

I’m 80, have had a SMSF since 2022, now have substantially more than we started with, have lived well off the income and have added to non super investments from allocated pension income. I enjoy investing and will NEVER put our future in the hands of “ experts “.

William Brosnan
February 04, 2024

Thanks to all those who posted comments. The issue of how to roll from an SMSF into Unisuper or Qsuper without having to go into an accumulation account and then sell/buy into the income account is something new to me.
We, 76 and 77y/o retirees have been considering either rolling the SMSF into the above or, rolling the Qsuper income and accumulation accounts into the SMSF. From the comments made, rolling everything into the SMSF looks like a better course of action. I'd appreciate Derek's response to Ron's experience.

February 03, 2024

Thanks Derek. I will get in touch.

Derek Gascoigne
February 06, 2024

Thanks Ron, I look forward to speaking with you. Just to add a little bit in advance: to be eligible to purchase a UniSuper pension if you’re not an existing member, our fund rules require you to first apply for an accumulation account with us. Our accumulation and pension investment options have exposure to the same underlying assets, very similar account fees and costs and we don’t apply buy/sell spreads or other fees as you move through the products. Given this, large movements in your balance likely reflect movements in investment markets. We can look at this more closely when we speak. All the best, Derek

February 02, 2024

Seems to me that people are confused here. The person who incurred the $50k obviously invested their funds in accumulation rather than leaving it in cash and immediately rolling into pension phase.

When closing a SMSF you need to cash out all investments, roll this cash into an accumulation account then convert it to a pension. All funds MUST do this. You cannot go from pension in one super fund straight to pension in another fund. That said there should be no loss going from accumulation to pension (if money is in cash) and it should appear seemless.

February 01, 2024

As we age our ability and willingness to make financial decisions decreases. In the case of couples, if one spouse is the only one aware of the investment details, there is the risk of leaving their partner with difficult financial decisions should something happen to them. You trade off the savings or possible better performance of an SMSF for the more simple option to join a super fund.

Derek Gascoigne
February 02, 2024

Hi Abel - all valid points and in the situation of a couple, it's certainly something that needs to be considered when making these sorts of decisions: we often see in couples one half has a better understanding and grasp on their financial and would cope well (in that regard) if the other half predeceased them, but certainly not so much the other way around.

February 01, 2024

I was one of those who, later than the average, at age 75 rolled out of our SMSF into Unisuper. Apparently the law requires such a rollover to go into accumulation mode. As we were already retired, we needed to move our funds into pension mode. As I understand the process, this required our investments in accumulation to be sold and then repurchased into our pension account. As a result we lost in the vicinity of $50k. I wonder if others have experienced the same event. And why if you are already a retiree, does the law require you to rollover into an accumulation account?

February 01, 2024

Hi Ron,
WE also rolled out of our pension mode SMSF into two industry funds, Aust Super and Hostplus, stragith from Pension mode into pension mode. WAs keen to into QSuper but they required us to do what you had to do. We suffered no loss in our change

Roy Davenport
February 02, 2024

Thanks Ron. We are in the process (ages 75 & 74) of rolling over from SMSF and were considering QSuper but will now look at Aust Super.

February 01, 2024

This glitch needs further analysis. We are just about to do the same with Unisuper or AusSuper. I wasn't aware of this cost impost re going in via either Accumulation vs Pension accounts Can we have someone at First-line look at this please?

February 02, 2024

Can you tell us more about why these $50K costs were incurred? If you rolled from an SMSF my understanding is that that needs to be done after cashing out your SMSF assets (which may involve substantial transactions costs) but once rolled into an Accumulation A/c with an Industry Fund I would have thought that then switching those funds into a Pension account would have been close to costless. Or better still, rolling over directly into a Pension A/c. Is this something peculiar to UniSuper? Am I missing something?

February 02, 2024

Bill, I don't know if it's unique to UniSuper. I was told by their reps that it was a requirement by law that funds would initially be directed to Accumulation and that direct investment within a pension account was not an option. The cost to us was unrelated to fees which were miniscule. The process of transferring to a pension account involves sale of the shares in the accumulation account and repurchase in a pension account and that is subject to the vagaries of the stock market. I would really value a comment from Unisuper to clarify the situation.

Derek Gascoigne
February 03, 2024

Hi Ron, thanks for your comment. I don’t know the exact circumstances of your situation and what may have contributed to any potential ‘loss’, but can certainly look into this so please contact us to discuss your experience.


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