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More SMSF start-ups seeking financial advice: Vanguard
Individuals setting-up self-managed super funds (SMSFs) – of whom about one-third are either planning for or are in retirement – increasingly want financial advice.
That’s a key finding of the 2025 Vanguard/Investment Trends Self-Managed Super Fund Report that shows adviser influence is growing in new SMSF set-ups, although the broader SMSF population still has significant advice needs.
The total number of SMSFs climbed from 612,000 at the end of 2023 to a record 638,000 by the end of 2024, following the creation of 25,969 new funds. The combined assets from the new funds, along with strong investment gains over the period, helped lift total SMSF assets to more than $1 trillion for the first time.
The 20th edition of this research report found that interest in setting-up SMSFs is rebounding, with industry fund members showing slightly higher intent – driven more by perceptions around performance than their retail peers.
Of the total 2024 SMSF inflows, 57 per cent reflected rollovers from industry super funds and a further 23 per cent rollovers from retail funds.
The top motivations cited for establishing an SMSF were more control over investments (65 per cent), achieving better returns (38 per cent) and having greater transparency of investments (31 per cent).
None of this growing attraction of SMSFs surprises Renato Manias, an adviser with the Melbourne-based firm Wattle Partners.
“SMSFs offer greater control and flexibility, allowing trustees to devise tailored strategies that align with their financial goals without the restrictions of an APRA fund,” he says. “They can also invest in a wider range of assets, including direct property, collectibles and private companies.”
He adds that there can be cost savings for larger balances, tax planning – more control over timing of contributions, pensions and asset sales to allow for tax minimisation for member and their beneficiaries – estate planning and the opportunity to pool family health.
Manias concludes: “An SMSF works if you’re seeking control, flexibility and tailored investment options – and if you’re prepared to handle the responsibilities. It is essential to seek financial advice before making the switch to ensure it is appropriate for your circumstances.”
The Vanguard report notes that many who establish an SMSF still have a separate super account alongside their own fund, primarily to access cheaper insurance coverage, for diversification purposes and in case they decide to switch back to an APRA-regulated fund.
Still significant advice gaps
The number of SMSFs using financial advisers grew to 155,000 in 2024, up from 140,000 in 2023. But this means 483,000 SMSFs – the vast bulk of the sector – are not using a financial adviser.
“Although Australia’s SMSF sector is continuing to grow, the research for this year’s report clearly highlights that there are significant advice gaps for many individuals operating their own super fund,” says Renae Smith (pictured), chief of personal investor, Vanguard Australia.
“Only 24 per cent of SMSFs use a financial adviser, which is not ideal when you think of the many complexities associated with managing superannuation, including keeping track of changes in rules and regulations, administration, taxes, choosing what to invest in, and then personal considerations such as retirement income needs and estate planning.”
The latest research found that advised SMSFs are more likely to report advice gaps around intergenerational wealth transfers (29 per cent) and estate planning (37 per cent), while newly established SMSFs are far more focused on tax minimisation (37 per cent), insurance (26 per cent) and buying an investment property (25 per cent).
Tax and retirement planning represent the largest cluster of unmet needs, impacting 280,000 SMSFs.
Barriers to closing the advice gap remain complex. Among advised SMSFs, a lack of holistic advice is increasingly cited (23 per cent, up from 16 per cent), while cost (33 per cent) stands out as the primary hurdle for newly established SMSFs.
“On the bright side, the research found that 34 per cent of unadvised SMSFs now plan to seek financial advice, which is up from 25 per cent the year before,” Smith says.
“But this percentage needs to grow. Vanguard has long been a proponent for the value of financial advice and the benefits it can deliver and has strongly advocated for Australians to have easier access to affordable advice solutions,” she says.
