There’s a lot of choice when it comes to super funds and the type of fund you’re invested in can affect things like the fees you’ll pay or the investment choices you have – which can impact your retirement savings.
One of the main types of super fund in Australia are industry funds. Unlike retail funds owned by banks or financial institutions, industry funds do not pay dividends to shareholders; profits are returned to the members.
Originally created by trade unions for workers in specific industries, they are now generally open to all. They aim to deliver strong, long-term investment performance and competitive fees to maximise retirement outcomes for their members.
Vision Super is an industry fund and was originally established as a public sector fund to provide superannuation cover for local government, the water industry and other local governing bodies in Victoria.
Another type is a self-managed super fund (SMSF), which is a super fund you set up and manage yourself. An SMSF can have up to six members, all of whom are equally responsible as trustees for running the fund and meeting its tax and super obligations.
SMSFs can offer flexibility and investment choice, but they involve significant trustee responsibilities, compliance requirements, time commitment and costs.
Possible issues to consider
Before establishing an SMSF, you should consider the “cons” alongside the “pros”. You can get help from a financial adviser to make this assessment. However, note that a recent report by the corporate regulator, ASIC (Report 824) found that poor financial advice relating to the establishment of SMSFs could be putting some Australian’s retirement savings at risk[1].
Managing a SMSF is a lot of work, and you need enough time both to set up the fund and manage ongoing activities, such as:
- Researching investments
- Keeping up to date with changes in superannuation and tax laws
- Setting up and reviewing an investment strategy
- Accounting, keeping records, and arranging an audit each year by an approved SMSF auditor
It’s worth noting that SMSF trustees spend on average more than eight hours a month managing an SMSF, which is more than 100 hours a year[2].
There are strict rules about what a SMSF can invest in, and you could face fines or end up in court if assets are misused, as a SMSF must be used for the sole purpose of providing retirement benefits to its members.
It’s illegal to use SMSF money before you are entitled to access your super and you cannot use SMSF funds to pay for personal expenses, such as buying a car or home loan repayments. In the event of theft or fraud, SMSFs generally do not have access to the government financial assistance arrangement which is available APRA-regulated funds.
The true cost of running an SMSF
Running your own super fund is not free – a SMSF involves set-up costs and accounting, auditing and other fees (such as legal fees) borne by you and other members of the SMSF (if any). Unlike Vision Super, where we use our scale to help keep costs low for all members, the size of an SMSF means the impact of running costs could be significant.
According to an ATO statistical overview, the median total expense to run an SMSF was approximately $9,874 for the 2023/24 financial year[3]. If your balance is under $500,000, these fixed costs can eat into your retirement savings compared to the fees you might pay in an industry fund.
If you seek expert advice to help with your SMSF’s investment strategy and the selection of investments, additional fees will apply.
You’ll also have to decide if you want to purchase insurance, but premiums can be higher for SMSF members. This is because many industry funds hold group life insurance policies (sometimes with limited or no underwriting for eligible members) and can negotiate bulk insurance rates.
If you have an SMSF and want insurance cover, you’ll have to organise your own ‘individual’ policy, which can involve underwriting and different premiums/terms. Insurance cover through a group insurance policy may be cheaper and easier to obtain than through individual insurance (depending on your circumstances such as your age, medical history etc).
Which is the right option for me?
This question is not an easy one to answer, as there isn’t a ‘one-size-fits-all’ approach to suit everyone – what’s right for you will depend on your unique situation and personal circumstances, and you may wish to speak to a qualified financial adviser so they can help you make a more informed decision.
If you’re keen to learn more about the basics of super, you can access the Vision Super online learning platform by visiting www.visionsuper.com.au/education. Otherwise, if you have any questions about your super, you can call our Member Services team on 1300 300 820, Monday to Friday 8:30am to 5pm, or email memberservices@visionsuper.com.au.
Any advice in this article is general only and has been issued by Vision Super Pty Ltd (ABN 50 082 924 561) (AFSL 225054) as the Trustee of the Local Authorities Superannuation Fund (ABN: 24 496 637 884) (‘Vision Super’). The advice does not take into account your personal objectives, financial situations or needs. Before acting on the advice, you should consider whether it is appropriate for you, having regard to your own circumstances, and obtain the appropriate Product Disclosure Statements (PDS) / Member Guides and Target Market Determination (TMD) available at www.visionsuper.com.au.
[1] Refer to the ASIC report, https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2025-releases/25-265mr-asic-review-raises-fresh-concerns-over-risks-to-retirement-savings-from-poor-smsf-advice/
[2] Based on ‘SMSF Investor Report, April 2021, Investment Trends’ – noted at Moneysmart: https://moneysmart.gov.au/how-super-works/self-managed-super-fund-smsf.
[3] Based on data collected by the ATO. Expense calculations for SMSFs aren’t necessarily the same as for APRA-regulated funds. See: https://data.gov.au/data/dataset/self-managed-superannuation-funds/resource/7a50c5c8-5c0e-4a4b-a11e-feaad39f2bd0
