Who should (and should not) set up an SMSF in Australia?

An SMSF gives you control over how your retirement savings are invested — but control comes with real responsibilities and real fixed costs. This guide walks through the five questions that decide whether an SMSF is right for you, and the warning signs that an industry super fund is the better choice in 2026.

Question 1 — Is your combined balance high enough?

ASIC and the ATO both publish guidance suggesting SMSFs with a combined member balance under roughly $200,000 are unlikely to be cost-effective compared with a low-fee industry fund. The reason is simple maths: an industry fund charges a percentage of your balance, an SMSF charges a fixed dollar amount, and the crossover point is somewhere between $200,000 and $300,000 for most members. Use a fee calculator to model your specific numbers before deciding.

Question 2 — Will you take trustee responsibilities seriously?

Every SMSF trustee must sign the ATO's NAT 71089 trustee declaration within 21 days of being appointed. You are legally responsible for keeping records for 5–10 years, preparing an investment strategy, ensuring the fund only invests for retirement (the sole purpose test), and signing the annual return. None of this is optional, and 'I'll let the accountant deal with it' is not a defence if the ATO comes asking.

Question 3 — Do you actually want to make investment decisions?

An SMSF only delivers value if you use the control. If you would invest the same way an industry fund's MySuper option does, you are paying fixed SMSF costs for an outcome you could get for less. The members who get the most out of an SMSF want to do at least one of: direct shares, direct property, term deposits laddered for retirement, unlisted investments, or cryptocurrency within the SIS Act rules.

Question 4 — Do you have the time?

Even with a good administrator, expect to spend a few hours per quarter on trustee minutes, investment decisions, and signing things. That goes up sharply if you hold direct property, run pensions for multiple members, or trade actively. If your time is genuinely scarce and you would resent the obligation, an industry fund's set-and-forget model is a better fit.

Question 5 — What is your insurance situation?

Industry funds bundle group life, TPD and income protection insurance at wholesale pricing. SMSFs need to source insurance separately, which is doable but takes work and is often more expensive at older ages or for members in higher-risk occupations. If insurance through super is a meaningful part of your protection plan, factor the replacement cost into the comparison.

Who is an SMSF clearly right for?

• Combined balance above ~$300,000 across the members who would join
• Genuine interest in direct shares, property, term deposits or other specific assets
• Couples who want to pool balances (4-of-5 SMSFs are 2-member funds)
• Business owners considering buying their business premises through super
• Members willing to act as trustees and keep records for at least a decade

Who should probably stick with an industry fund?

• Combined balance below $200,000 with no near-term plan to grow it materially
• Members who want a hands-off retirement product they never have to think about
• Anyone uncomfortable signing legal declarations and keeping compliance records
• Members whose primary need from super is bundled group insurance

If you are still on the fence, the easySMSF vs industry super calculator at easysmsf.com.au/calculator lets you plug in your numbers and see the long-term fee difference before you commit.

Sources: Australian Taxation Office — Thinking about self-managed super (ato.gov.au); ASIC — Self-managed super funds (moneysmart.gov.au); Superannuation Industry (Supervision) Act 1993.