Many in retirement are travelling comfortably, with three key factors contributing to their happiness – good physical and mental health and enough money to enjoy life.
Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
Advised SMSFs have an investment edge over self-directed funds
For self-managed retirees, the evidence is mounting – those who opt for an adviser are increasingly outperforming funds that are self-directed.
In the February 2025 AUSIEX report, SMSFs under Advice, it highlighted that not only did advised funds trade more actively in 2024, but that the value of their holdings increased significantly compared with non-advised funds.
The findings complement the annual research report by the University of Adelaide’s International Centre for Financial Services (ICFS) that said advised SMSFs tended to outperform non-advised funds (7.6 per cent versus 6.4 per cent for the 2022-23 financial year).
The comprehensive ICFS report, which also showed SMSFs outperformed APRA-regulated funds, on average, by 1.2 percentage points a year over the past five years to 30 June 2023, has become the bellwether for the sector, with the data drawn from nearly 70 per cent of all SMSFs.
Brett Grant (pictured), head of product, customer experience and marketing at the wholesale trading platform AUSIEX, says the increased value of holdings for advised SMSFs appears to have been supported by significantly more diversified holdings across sectors and securities.
“This includes an increasing allocation to ETFs – in stark difference to non-SMSF accounts and self-directed SMSF accounts that prefer direct equities.”
He adds that SMSFs traded more in 2024 than they did the previous year, up 7.5 per cent (by number of trades) year-on-year.
“We believe the increase was, in part, due to increased additional interest in global equities, in particular global equity and US equity ETFs.
As the report highlights, ETF trading picked up in the second half of 2024, with domestic fixed interest and global equities the standouts, reinforcing a recent research report by the US global fund manager Vanguard.
“With the strong growth of local and global markets in 2024, it’s not surprising that total advised SMSF holdings rose significantly, up 8.8 per cent at January 1, 2025 compared with January 1, 2024.
“However, when we break down this result, we see that the increase was quite disproportionate, driven largely by advised SMSFs, where total holdings started 2025 up 13.5 per cent while self-directed funds were only up 3.1 per cent,” the report says.
“Looking at the intra-year trends, we see much of the growth in the value of advised funds coming from July to November in line with the strong market performance.”
The report also drew attention to the fact diversification across asset classes and sectors was a hallmark of advised funds – a decisive factor in investment outperformance in 2025.
“Examining the holdings of advised SMSF accounts by asset type in 2025, we find a strong allocation to passive ETFs, accounting for almost a third of total portfolio value, with direct equities just over 50 per cent.
“Self-directed SMSFs were more concentrated in their asset preferences, with direct equities comprising over 86 per cent and ETFs just over eight per cent.”
The ICFS research project, which is headed by senior lecturer George Mihaylov, stated that the APRA-regulated funds outperformed the SMSF sector 2022-23 – in part because of the SMSF sector’s underweight position in international equities.
But those SMSFs that were advised typically had greater exposure to overseas markets, often via an ETF, helping to explain why they outperformed in 2024.
“The research results indicate that SMSF trustees who received financial advice are associated with funds that reported materially higher investment returns in 2022-23,” says Mihaylov .
For Peter Burgess, chief executive officer of the SMSF Association, this comes as no surprise. “It has always been our mantra that SMSF trustees achieve better outcomes when they have access to professional SMSF advice,” he says.
