A rise in new self-managed super funds is being led by younger Australians eager to take charge of their retirement planning. Government data reveals over 52,000 fresh SMSFs were established last financial year, while closures dropped to just 5,011—bringing the national total to a historic 680,301, a 12% increase over two years. These funds now hold more than $1.1 trillion, expanding beyond their traditional appeal to affluent or self-employed individuals.
A shift in mindset
Robert Devlin, head of advice at Tribeca Financial, attributes the recent boom in SMSFs to Australians wanting greater oversight of their investments. ‘People increasingly want input on where their super is allocated,’ he notes. ‘As their balances rise, they become more involved in managing them.’ Peter Burgess, CEO of the SMSF Association, adds that demand is also driven by a desire for clearer financial transparency, with higher compulsory super contributions—now at 12%—helping members accumulate larger savings.
The latest ATO data for 2023–24 shows the average superannuation balance at nearly $183,000, while APRA figures indicate SMSFs now average $1.63 million per fund. Most SMSFs include up to six members, with two-thirds having just two participants. Total membership has surged 11.6% to 1.25 million since 2024. Burgess observes, ‘Australians’ views on retirement savings are transforming rapidly. Three straight years of unprecedented SMSF growth prove this shift in priorities.’
Though superannuation typically remains inaccessible until age 60, Burgess highlights that younger Australians are now planning for retirement sooner. ‘By the June 2026 quarter, half of all new SMSF setups were by individuals under 45,’ he states.
For people with growing balances, this trend can change how they interact with their money. When retirement feels like a distant event rather than a looming deadline, the pressure to manage every dollar immediately fades, allowing savers to take a longer view on asset allocation without the fear of short-term market swings.
Property purchase bans
Devlin identifies property investments as the primary factor behind SMSF growth. ‘The direct ability to own real estate through super has been a key motivator,’ he explains. Holding an investment property in an SMSF until retirement, then converting it into a tax-free pension, avoids capital gains tax. However, this approach faced a major setback in June when the Albanese government, under Green Party pressure, prohibited SMSF borrowing for residential property purchases, a policy reversal aimed at securing budget tax reforms.
While residential property borrowing within super is now restricted, Devlin clarifies that commercial real estate remains unaffected. ‘Business owners still have valid reasons to use their SMSF for commercial premises, including potential financing,’ he says. Cash purchases of residential properties are still possible, but the government’s change means smaller-balance funds can no longer leverage debt for such investments.
How much you need
Financial advisers once recommended a minimum $200,000 super balance for SMSFs to be practical, but many now suggest higher thresholds. ‘There’s no fixed rule,’ Devlin notes. ‘Generally, balances between $400,000 and $600,000 make the ongoing costs more manageable.’
These costs can include fund administration, financial statements and tax returns, annual independent audits, potential investment fees and brokerage, ongoing advice, and company registration and ASIC fees in some cases. JBS Financial Strategists chief executive Jenny Brown said accounting and audit fees alone could cost $2000-$3000 annually.
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“A lot of people don’t realise that there’s a lot of fixed costs,” she said. “Unless they’re prepared to do some or all of the work themselves, then they need to outsource it, and then often the costs can become the same as a platform.”
“Our view is unless you really want to buy property in it, or do something like crypto, and I’m not recommending that, with smaller balances they just don’t stack up,” Brown added. “If you’re going to buy a whole lot of direct shares, ETFs and term deposits, you can do that in a platform.”
“If you’ve got in excess of $1m they do stack up,” she continued. “But if you’ve got under $500,000 my view is they don’t, unless you’re prepared to do the investments and administration yourself.”
Should you start an SMSF?
Brown advises that SMSFs suit those with substantial balances who are willing to take an active role. ‘About half our clients use self-managed super,’ she says. ‘I’m a strong advocate, but they’re only appropriate for the right people.’
Devlin said SMSFs “can be fantastic, but they shouldn’t be entered into lightly.” He said that if you want more control, have enough scale, and there is a genuine investment or strategic reason for having an SMSF, then it can absolutely be worth considering.
“But I wouldn’t set one up just because you can,” Devlin said. “For a lot of people, the alternatives like retail or industry funds will suit them a lot better, even with larger balances.”
A key reason for this is the responsibility, compliance and administration that comes with DIY super, Devlin said. “And you need to think further ahead, particularly around liquidity as you get older.”
Burgess noted that illiquid investments like property could be problematic when it came time to pay out benefits. He also said SMSFs do not have the same access to government compensation arrangements for theft or fraud that apply to APRA-regulated funds.
“While an SMSF can be an effective retirement savings structure, its success depends on informed decisions, sound governance, and continued engagement.”
