Self-managed super funds (SMSFs) continue to grow at record pace in Australia. But a notable shift is underway: more SMSFs are being established without the involvement of a financial adviser.
Recent industry data suggests that around four in five new SMSFs are now established without advice, a trend that has steadily increased over the past three years. At the same time, advisers are losing their historical lead as the primary gateway into the SMSF sector, as highlighted in a recent Financial Standard panel discussion.
So, what’s driving this change? What are unadvised trustees doing with their SMSFs? And perhaps most importantly, are these funds safe without professional guidance?
Why are more SMSFs being set up without advice?
Several structural and behavioural factors are converging.
- Lower barriers to entry
The cost and complexity of establishing and administering an SMSF has fallen significantly. Digital platforms, low-cost administrators and automated compliance tools mean SMSFs are now affordable at lower balances than in previous generations.
For many younger Australians, the SMSF itself becomes affordable before comprehensive advice does.
- Adesire for control
“Control” remains the dominant motivation for SMSF establishment. ASIC has consistently found that trustees are drawn to SMSFs because they want more autonomy over investments and strategy.
However, ASIC also warns that control is often poorly understood and can be overstated, particularly when people underestimate the responsibilities and risks involved.
- Digital self-education
Today’s SMSF trustees are digitally native. They research online, consume financial content, listen to podcasts and participate in forums. For many, advice is something to be sought later, not at the decision point.
As one industry expert noted, “people are evaluating and making the SMSF decision before engaging advisers”.
Why SMSFs appeal: The key benefits
- Control over investment decisions and timing (within super rules)
- Wider investment choice, including direct shares, ETFs and (where appropriate) direct property
- Strategic flexibility—how you structure contributions, pensions and cash flow as retirement approaches
- Potential tax efficiency opportunities when strategy, assets and documentation align
- Transparency—trustees can see exactly what the fund owns, what it costs and how it’s performing
These advantages are real—but the trade-off is that trustees take on duties that are largely handled for you in APRA‑regulated super funds.
What are unadvised SMSFs investing in?
Without advice, SMSF trustees are often more concentrated and more experimental in their investment choices.
Direct shares and property
Unadvised trustees tend to favour:
- Direct Australian equities
- Residential or commercial property (sometimes via limited recourse borrowing arrangements)
Property-driven SMSFs, in particular, have attracted regulatory scrutiny when leverage and concentration risks are not fully understood.
Crypto and high-growth assets
A growing number of SMSFs are investing in cryptocurrency and crypto ETFs often without adviser involvement. Research shows a significant gap between what advisers think clients are doing and actual investor behaviour, with many trustees entering digital assets independently.
Less diversification
Data comparing advised and self-directed SMSFs shows unadvised funds generally hold:
- Fewer assets
- Lower exposure to defensive and fixed-income investments
- Less global diversification
Advised SMSFs, by contrast, are more likely to use ETFs and diversified structures to manage risk and volatility.
Key pitfalls to watch (especially without a clear plan)
SMSFs can work well when trustees understand their obligations and have an investment and retirement strategy that matches their circumstances. The challenge is that many risks don’t show up immediately—they emerge over time through small compliance gaps, portfolio concentration, or decisions made without considering tax, liquidity and insurance.
Regulators continue to highlight recurring problem areas for SMSFs. Common pitfalls include:
- Moving from an APRA‑regulated fund without fully weighing what you may give up (default insurance, governance and certain protections)
- Inadequate or forgotten insurance—cover can lapse during rollover, or be too low for changing needs
- Over‑concentration (e.g., one property or a handful of shares), leading to higher volatility and liquidity stress
- Liquidity and cash‑flow blind spots—struggling to pay expenses, tax, pensions, or meet minimum pension payments
- Using leverage (including LRBAs) without a clear risk buffer, exit plan and documentation
- Documentation and compliance gaps (investment strategy not updated, missing minutes, related‑party rules, valuation support)
- Behavioural traps—overconfidence, chasing trends, or reacting emotionally in volatile markets
SMSFs now account for around $1 trillion, nearly a quarter of Australia’s superannuation system, making these risks increasingly systemic rather than isolated.
Where professional guidance can add value
This shift doesn’t mean trustees can’t run successful SMSFs. It does mean there’s a growing opportunity to bring support in where complexity, risk or life changes start to matter more.
- Strategy, not setup
Trustees can now establish an SMSF easily. What they struggle with is:
- Structuring investments for long-term outcomes
- Managing tax efficiency
- Sequencing strategies as retirement approaches
This is where advice delivers enduring value.
- Risk and behavioural coaching
Unadvised SMSFs are more exposed to concentration risk, market timing and emotional decision-making. Advisers provide discipline, balance and perspective, particularly during market stress.
- Investment governance
Advisers help trustees:
- Build compliant investment strategies
- Review asset allocation
- Document decision-making for audit and regulatory scrutiny
This governance lens is often missing in self-directed funds.
- Meeting trustees where they are
Many unadvised SMSF trustees are not anti-advice, they’re pre-advice. They are engaged, informed and willing to seek guidance once complexity increases.
As the SMSF Association notes, many trustees will “gravitate to advice over time” as their needs evolve.
The bottom line
More Australians are setting up SMSFs because they want greater control, broader investment choice and more flexibility in how they manage their super. Those benefits can be meaningful—but they come with higher trustee responsibility and a handful of common pressure points, including diversification, liquidity, insurance and keeping strategy and documentation up to date.
