50,000 Australians Took Control of Their Super Last Year, Why It Could Be Worth It

Commentary

More than 50,000 new self-managed superannuation funds (SMSFs) were established during the 2025–26 financial year, as Australians increasingly seek greater control over how their retirement savings are invested.

The Australian Taxation Office’s latest quarterly SMSF statistics, released on Sept. 8, show 12,264 new SMSFs were established during the June quarter alone, helping push the sector to a record financial year.

The growth is also being driven by a younger generation of investors, who are choosing to manage their retirement savings themselves rather than handing it to a corporate trustee (the default model).

Australians aged 35 to 44 accounted for 39.1 percent of new SMSF members, while almost 6 in 10 new members were aged between 35 and 49.

A young family at their home in the Eastern Suburbs in Sydney, Australia, on April 20, 2020. Lisa Maree Williams/Getty Images

SMSF Association CEO Peter Burgess said Australians wanted more control over their retirement planning.

“The record number of new SMSFs reflects a growing cohort of Australians taking an active interest in their retirement savings and wanting greater engagement with their long-term financial future,” he said.

The figures suggest that, for many Australians, superannuation is no longer something to be largely forgotten about until retirement approaches.

Australians Want Control Over Investment Targets

Greater control has long been one of the major attractions of an SMSF.

Rather than being limited to the investment options offered by a large superannuation fund, SMSF trustees can formulate their own investment strategy and select individual investments, within superannuation and taxation laws.

For some investors, control also extends to avoiding investments or investment policies they do not support, particularly amid the surge in environmental, social and governance, or ESG, in recent years.

Research by the Responsible Investment Association Australasia found 88 percent of Australians expect their investments to be managed responsibly and ethically, while 78 percent expressed concerns about “greenwashing.”

An SMSF gives trustees greater ability to decide for themselves which companies, industries and investment strategies their retirement savings support.

A couple enjoys breakfast at a busy Lygon Street cafe in Melbourne on Oct. 22, 2021. William West/AFP via Getty Images

SMSFs More Cost-Effective?

Cost can also become a factor, particularly as superannuation balances grow.

SMSFs do face accounting, administration and mandatory annual audit expenses, among other potential costs. However, some of these expenses can be relatively fixed rather than, in industry funds, charged purely as a percentage of the fund’s balance.

This is especially true for investors with larger balances, for example, $4,000 (US$2,800) in annual costs represents 2 percent of a $200,000 SMSF but just 0.4 percent of a $1 million fund.

By comparison, AustralianSuper’s Balanced option would cost about $1,352 a year on a $200,000 balance and about $5,952 on a $1 million balance.

This illustrates how larger balances can alter the cost equation. Of course, one would need to seek their on independent advice first.

Australian dollar coins and banknotes in Melbourne, Australia on April 4, 2024. AAP Image/Joel Carrett

Pooling Funds to Reduce Costs

An SMSF can also have up to six members, allowing eligible family members to pool their superannuation within the same fund.

A husband and wife, for example, can combine their retirement savings within an SMSF and share the administration costs.

Larger combined balances may also give trustees access to investments that would otherwise be difficult for an individual member, including direct property and private-market opportunities.

Greater Autonomy

SMSFs can potentially invest across Australian and international shares, managed funds, cash, bonds, direct residential or commercial property and certain alternative investments such as art, provided they comply with superannuation rules.

This flexibility allows trustees to build a diversified portfolio around their own objectives rather than selecting solely from an investment menu determined by a large fund.

Investors can still use accountants, financial advisers, brokers and other professionals while retaining ultimate responsibility for investment decisions.

For some, this combination of professional assistance and personal control can make an SMSF attractive.

There can also be greater flexibility when managing investments and cash flow during retirement, although access to superannuation benefits remains governed by Australia’s preservation and pension rules.

There is More to Consider Though

With greater control comes greater responsibility.

The Australian Securities and Investments Commission (ASIC) has repeatedly warned that SMSFs are not suitable for everyone and investors need to consider costs, diversification, liquidity, insurance and the legal responsibilities involved in becoming a trustee.

SMSF trustees remain ultimately responsible for ensuring their fund complies with superannuation and taxation laws, even when accountants, advisers and administrators are engaged to assist them.

The decision therefore involves considerably more than simply moving money from one super fund to another.

Yet the record establishment figures indicate a willingness by younger group of Australians to take the plunge and take on those responsibilities in exchange for greater control over their future.