A- A A+

Is there growing SMSF disillusionment?

23 April 2015  |  Super

quitNot everyone does well from an SMSF. The lure of having control over your own money is great, but that does not necessarily make for a happy experience. One of the biggest problems is that it only makes sense with a certain level of funds under management. A minimum amount is widely thought to be $300,000. Anything less and the fees are too high to justify the move. It would be better to go to a low cost alternative.

The accountants who often persuade their clients to go into SMSFs often neglect to mention this -- a severe conflict of interest because many get at least 40% of their income from servicing SMSFs.


The AFR is reporting that many are choosing to wind down their SMSFs:


"Australian Super, the nation's biggest industry fund with more than two million investors and assets of $85 billion, claims there has been a 33 per cent year-on-year increase in the number of investors leaving self-managed super for managed options.

Sunsuper, which has more than 1 million investors and $31 billion under management, says there has been a more than 45 per cent increase in funds under management returning from self-managed funds.


AustralianSuper group executive membership Paul Schroder said: "The idea that SMSFs are some sort of unstoppable investment juggernaut has stopped. In the face of changing circumstances people are being more discerning."

But Peter Burgess, head of policy, technical and educational services for AMP, the financial services giant with more than $19 billion of SMSF funds under administration, said there had not been an increase in wind-ups amongst its clients. 

"We think we have the right people setting them up," Mr Burgess said. "Growth is sustainable and controlled," he added. AMP has about $215 billion under management.

AMP's member accounts last year increased by more than 600 to 15,400."There are more than 520,000 self-managed super funds, more than a million members, and assets totalling more than $550 billion, or about a third of the nation's super savings. About 7000 SMSFs are set up every quarter.


If there is some disillusionment, it is only a recent trend. In the five years to 2014, which covers most of the global financial crisis, the number of annual wind-ups fell from more than 15,000 to just over 2000.

In the five years from the global financial crisis to 2013, the number of funds grew by nearly 30 per cent and are currently annually increasing by 7 per cent.


Source articles

Similar articles from Super

America having its own debate about financial advice

Staff reporter | 3/25/2015

debateIt is not just Australia that is looking very closely at the financial advice industry and its effect on retirement funds. The United States is also examining the issue closely as well.

Churn in the financial advice industry

Staff reporter | 3/23/2015

exitThe financial advice sector is making a come back, but there is a high level of dissatisfaction amongst some clients. Many also consider full service too costly.

Combining the housing and super juggernauts

David James | 3/11/2015

Joe HockeyPutting together super and housing would distort the Australian economy even more. Treasurer Joe Hockey's flagging of the idea seems ill advised.

When to quit an SMSF

 | 12/18/2014

ByeA Merry Christmas and Happy New Year to PSI readers. To end the year, we look at when an SMSF is closed.

Cutting out the middle man

 | 12/14/2014

Rick KlinkSMSF investors who are looking to diversify their investments often find themselves paying high annual fees. One provider reckons they have the solution.



Subscribe to the Personal Super Investor weekly email to keep abreast of developments in SMSF law and investment markets. SMSF investors looking to improve investment returns from shares, property, cash or other specialised investments, will find the PSI weekly newsletter an invaluable resource.

Subscribe now »



The contents of this website are of a general nature only and have not been prepared to take into account any particular investor's objectives, financial situation or particular needs. Our content is not intended to be advice and must not be relied upon as such. You should seek independent advice tailored to your specific circumstances prior to making any decisions. Personal Super Investor does not provide financial product advice or recommend any financial products: Where this website or it derived newsletter/electronic publication refers to a particular financial product, whether it be within our editorial or a 3rd party advertising, advertising promotion or advertorial, then you should obtain a Product Disclosure Statement (PDS) relating to that product and consider the PDS before making any decision about whether to acquire the product. We also recommend that you should seek professional advice from a financial adviser before making any decision to purchase any financial product referred to on this website. We do not make any representation or warranty that any material on the Personal Super Investor website will be reliable, accurate or complete, nor do we accept any responsibility arising in any way from errors or omissions of our content or any content provided by any advertiser appearing the Personal Super Investor website. We will not be liable for loss resulting from any action or decision by you in reliance on the Material (whether editorial or advertising) on the Personal Super Investor website, nor any interruption, delay in operation or transmission, virus, communications failure, Internet access difficulties, or malfunction in your equipment or software. By using the site you acknowledge that we are not responsible for, and accept no liability in relation to any content contained on the site that you may use, including any other users’ use of the Personal Super Investor website in any circumstance. You use the Personal Super Investor website at your sole risk.