For many Australians, superannuation starts as a “set and forget” decision. A workplace default fund is chosen, contributions flow in, and investment options are selected from a menu that can feel both broad and strangely limited at the same time. But as balances grow and goals become clearer, a different question often emerges: Should retirement savings be managed more actively, with tighter control over strategy, assets, and tax outcomes?
SMSFs are no longer a niche corner of the market. As at 30 June 2025, there were more than 653,000 SMSFs holding around $1.05 trillion in assets, with over 1.2 million members. This is a significant share of a super system that reached about $4.5 trillion in total assets by September 2025.
An SMSF is not “better” for everyone. It comes with responsibilities, compliance obligations, and ongoing costs. But for the right person, and in the right life stage, it can offer real advantages over a traditional retail, industry, or corporate super fund. Let’s unpack the key benefits through the lens of flexibility, asset choice (including property and precious metals), control, and tax savings.
1) Flexibility: Strategy Built Around Your Goals, Not a Product Menu
Traditional super funds are designed to work at scale. That is their strength. You benefit from pooled resources, professional management, and administrative convenience. The trade-off is that many decisions are made for you, or constrained by pre-set investment options.
SMSFs flip that model. Trustees can build an investment strategy tailored to their objectives, risk tolerance, time horizon, and cash flow needs, within super rules. This flexibility can matter in very practical ways:
• How assets are allocated (growth vs defensive, local vs global, listed vs unlisted).
• How liquidity is managed (keeping cash available for expenses, tax, or pension payments).
• How investments are staged over time (accumulation focus today, income focus later).
• How the fund aligns with broader family planning, including member balances and eventual retirement phase planning.
This is one reason the sector has continued to grow. ATO reporting shows SMSF numbers and assets at record levels through 2024–25.
2) Flexibility to Manage Your Money: Control, Timing, and Governance
A traditional super fund gives you exposure to markets, but not the steering wheel. An SMSF gives you control over whatyou invest in and when you transact.
That control can be valuable in markets like Australia’s, where timing, cash flow, and tax outcomes often move together. For example:
• Selling an asset after crossing a holding period threshold may reduce capital gains tax inside super (more on that shortly).
• Adjusting rental property cash buffers ahead of rate changes can reduce stress and forced selling risk.
• Rebalancing a portfolio when valuations shift can be done decisively, rather than waiting for a platform’s processing cycles or model portfolio updates.
Control is not the same as guaranteed outperformance, and it can magnify mistakes if governance is weak. But for disciplined investors who want hands-on oversight, it is a defining SMSF advantage.
3) Wider Asset Class Choice: Including Property, Gold, and Silver
A major drawcard of SMSFs is the expanded investment universe.
Property inside SMSF
Property is often the headline. SMSFs can invest in real property (subject to super law, investment strategy requirements, and restrictions on personal use). The scale of property interest is clear in ATO-based reporting: total SMSF investment in real property (direct and via limited recourse borrowing arrangements) was reported at about $200.5 billion in 2022–23.
For many investors, the appeal is straightforward: property is tangible, the income profile is familiar, and it can create diversification away from pure equities. SMSFs can also access borrowing under specific rules through limited recourse borrowing arrangements (LRBAs), where the lender’s rights are generally limited to the asset acquired.
Precious metals and other alternatives
Beyond property, SMSFs can hold assets that are not always easily accessed in traditional super structures, including certain forms of precious metals (such as gold and silver) when held and recorded in line with super rules and the fund’s strategy. The broader point is not that every SMSF shouldhold alternatives, but that the structure can allow it where it fits the strategy and compliance requirements.
This breadth of asset choice is a key structural advantage. It enables bespoke diversification, particularly for trustees who want a mix of listed markets, real assets, and defensive holdings that behave differently through cycles.
4) Tax Savings: The SMSF Advantage People Often Underestimate
Tax is where SMSFs can become especially compelling, provided trustees understand the rules and plan properly.
Concessional tax on earnings in accumulation
A complying SMSF generally pays tax at a concessional rate of 15% on its taxable income in accumulation phase. In a world where many Australians face marginal tax rates well above that, the super environment remains a powerful long-term compounding tool.
Capital gains tax discount inside super
Many investors know about the 50% CGT discount for individuals, but fewer appreciate that complying super funds can. Practically, that can reduce the effective tax rate on a discounted capital gain in accumulation phase.
This is particularly relevant for SMSF trustees investing in growth assets, including property held for the long term, where the timing of sale can materially change after-tax outcomes.
Potential tax-free earnings in retirement phase
When an SMSF moves into retirement phase (subject to the rules and caps that apply), earnings on assets supporting retirement phase income streams can be tax-free. This is one of the major structural advantages of superannuation generally, and SMSFs allow trustees to manage the transition with more control over which assets sit in which phase, how liquidity is handled, and how member balances are organised.
The important caveat is that trustees must follow the rules precisely and document decisions well. But done correctly, the difference between concessional tax and tax-free earnings over time can be substantial.
5) Why These Advantages Matter in the Australian Market
Australia is a market where household wealth is often concentrated in two places: property and super. SMSFs sit right at that intersection. The ATO’s latest report shows SMSFs holding more than a trillion dollars in assets, reflecting just how many Australians see value in control and customisation.
This does not make SMSFs a default choice. It makes them a strategic choice for people who want:
• A portfolio that mirrors their convictions (for example, property plus a carefully built equities core).
• Greater say over timing and cash management.
• A clear, documented plan for retirement phase and tax outcomes.
• The discipline to run the fund like a financial vehicle, not a hobby.
A Practical Reality Check: SMSFs Reward Discipline
The advantages above only hold when trustees do the work: compliance, record-keeping, valuations, audits, and a coherent investment strategy that matches member circumstances.
SMSFs offer flexibility, but flexibility without governance can become risk. Property inside super funds can be powerful, but liquidity mismanagement can be painful. Tax benefits are real, but only when rules are followed and decisions are documented.
If the idea of control is attractive, the best next step is not to “set one up immediately.” It is to assess whether an SMSF fits your balance size, time availability, investment complexity, and long-term plan, and to get qualified advice so the structure matches the strategy.
For Australians who are ready for that responsibility, SMSFs can offer a rare combination: autonomy, broader asset access, and potentially improved after-tax outcomes, all inside one of the most important wealth-building systems in the country
