Why advisers should look to the ‘massive untapped’ opportunity in SMSFs

In its latest Annual Benchmark Report, which draws on data from more than 180,000 self-managed super funds (SMSF) on its administration platform, Class found that just 27 per cent of these funds currently pay an adviser fee.

This is broadly in line with the Vanguard/Investment Trends SMSF Report from earlier this year, which put this number at 24 per cent, leaving somewhere in the range of 483,000 SMSFs unadvised.

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According to Findex associate partner Neil Sparks, this represents a “massive untapped market opportunity” for financial advisers.

“Self-managed super funds are no longer a niche corner of the superannuation system. With more than $1.05 trillion in assets and over 1.2 million members, SMSFs account for a quarter of Australia’s retirement savings,” Sparks wrote in the Class report.

“For financial advisers, they represent not just a retirement saving vehicle but a strategic opportunity to engage high-value clients, strengthen intergenerational relationships and deliver measurable advice outcomes.”

With 41,980 new funds established in FY2024–25, Sparks said the age of new trustees is an important detail. Class found that around 37 per cent of these new trustees was 35–44 years old.

“This concentration in the 35–54-year range makes SMSFs the ideal structure for advisers to build long-term client engagement and guide members from accumulation through to pension and estate planning,” he said.

“While SMSFs are a long-term structure, only a small minority close in the early years. Encouragingly, only 0.5 per cent close in the first year, and just 3.4 per cent between years three and five, meaning just 7 per cent close within their first five years. Once established, most trustees remain committed – evidence that SMSFs are a durable, resilient client segment in wealth management.”

The report also found that the average advice fee for SMSF advice was around $8,000 per year, which Sparks said reflected the “complexity of these funds and the breadth of strategies advisers can deliver”.

“Far from ‘set and forget’, SMSF trustees value premium, ongoing advice covering investment, compliance, tax and succession,” he said.

“For integrated firms with accounting and SMSF administration in-house, the opportunity is even greater. SMSFs allow advisers to deliver a seamless experience alongside tax and compliance professionals, deepening client trust and capturing more of the value chain.”

He added: “SMSFs are complex, but complexity is where advisers create value. Research shows advised SMSFs consistently outperform non-advised funds.”

Illustrating the complexity, the report data showed that advised SMSFs are far more likely to identify sophisticated needs in areas such as estate planning, succession and family wealth transfer.

“These engagements are more involved, with fees that reflect the scope of work, while creating long-term, multigenerational client relationships. For firms positioning themselves for sustainable growth, the SMSF sector is an unmatched opportunity,” Sparks said.

“SMSFs offer unmatched flexibility, tax efficiency and estate planning advantages, making them a powerful tool for advisers and clients alike.

“Clients benefit from advice in SMSFs and advisers who meet them where they are will secure loyal, multigenerational relationships.

“The sector is growing rapidly, unmet advice needs are significant, and the value of advice is proven. For firms that want to expand, differentiate and future-proof, the message is clear: SMSFs can play a central role in a future-focused advice model.”