SMSF establishments reached record levels in the September quarter of 2025, but a growing number of trustees are setting them up without seeking financial advice or support.
New data from accounting and SMSF administration software provider Class, presented to the SMSF Association National Conference in Adelaide on Wednesday, shows that almost 14,500 new funds were set up in the first quarter of 2026, the highest single-quarter number since Class began tracking establishments in 2012 and a jump of one-third over the same period last year.
SMSFs now account for $1.07 trillion of retirement savings, or about a quarter of the system’s total of $4.47 trillion. SMSF Association chief executive Peter Burgess told the conference’s thought leadership breakfast that successive years of near record growth “suggests structural change is underway” and that it is more than a short-term spike.
But the number of SMSFs established without financial advice is slowly trending upwards. Data collected by Class on financial advice fees shows 80 per cent of SMSFs were established without advice in FY25, continuing a mild upwards trend from FY24 (79 per cent) and FY23 (78 per cent).
Even among the SMSFs administered by Class, 73.2 per cent of SMSFs were set up without advice in FY24, although that figure is down slightly on the 74 per cent the year before.
The total number of unadvised SMSFs passed 480,000 in 2024 as the number of authorised advisers fell, from 15,622 to 15,477 over the same period.
Burgess said the high number of unadvised trustees represented an “enormous” opportunity for advisers.
“But with an advice framework that is not fit for purpose, and the rising cost of advice, we risk stifling these opportunities,” he said.
Heffron Consulting managing director Meg Heffron, and new SMSF Association vice chair, said it was paradoxical that the cost of advice means it is more affordable for younger Australians to set up an SMSF than it is to seek financial advice.
“The SMSF itself is becoming affordable before they can afford advice – so people are evaluating and making that choice before engaging advisers,” she said. In addition, it is becoming economically viable for younger Australians to set up SMSFs earlier in life than it was for their parents.
Class CEO Tim Steele said the SMSFs are becoming more accessible for younger people with modest account balances. The Class data shows that Millennials (aged 30 to 44) and Gen X (45 to 59) in combination accounted for 90.3 per cent of SMSF establishments over the past six months, up from 87 per cent, at 30 June 2025.
The growing numbers of unadvised trustees has sparked concerns about their ability to make the most of the structure they’ve set up, and has added to concerns about superannuation, including SMSFs, being included in the funding mechanism for the Compensation Scheme of Last Resort.
Heffron said that the biggest risk unadvised trustees face is not compliance breaches but failing to maximise the utility of an SMSF, including not setting up insurance, not maximising strategic opportunities, and paying too much tax.
Burgess said it was not appropriate to use Australians’ retirement savings – whether in APRA-regulated funds or SMSFs – to paper over the shortcomings of the Compensation Scheme of Last Resort.
“It socialises the cost of misconduct and systemic failure by shifting it onto individual fund members and does not align with the government’s own legislated objective of superannuation – to preserve savings to deliver income for a dignified retirement,” Burgess said.
“Every day Australians should have confidence that their superannuation savings are being preserved to support their retirement rather than being used as a ‘honey pot’ to fund black holes.”
