Why Financial Advisers Can’t Afford to Ignore the SMSF Opportunity

As a paraplanner working with financial advisers across Australia, I’m constantly amazed by the opportunities that sit right under our noses. The latest Vanguard/Investment Trends SMSF report, as reported by Financial Adviser, should be a wake-up call for any adviser who hasn’t yet embraced the self-managed super fund market.

The numbers tell a compelling story: SMSF trustees using financial advisers jumped from 140,000 in 2023 to 155,000 in 2024. That’s a solid 10.7% increase in just one year. But here’s the kicker – only 24% of SMSFs currently use a financial adviser. With over 600,000 SMSFs in Australia, we’re looking at a massive untapped market of approximately 460,000 funds that are currently going it alone.

The Advice Gap is Real – and It’s Growing

What strikes us most about this research is the stark reality it reveals about advice gaps. While 34% of unadvised SMSFs now plan to seek financial advice – up from just 25% the previous year – the complexity of managing an SMSF without professional guidance is becoming increasingly apparent to trustees.

From our perspective in the paraplanning trenches, we see advisers wrestling with whether to enter the SMSF space. The perceived complexity often holds them back, but the reality is that with the right support systems, SMSF advice can be both manageable and highly profitable.

The research shows that newly established SMSFs have distinctly different priorities compared to their established counterparts. New trustees are laser-focused on tax minimisation (37%), insurance needs (26%), and investment property purchases (25%). These are bread-and-butter advice areas that most advisers are already comfortable with – they just need to be applied within the SMSF framework.

Where the Real Opportunities Lie

What’s particularly interesting is the difference between new and established SMSF advice needs. While new trustees are concerned with the fundamentals, established advised SMSFs are reporting gaps around more sophisticated strategies like intergenerational wealth transfers (29%) and estate planning (37%).

This creates a beautiful client journey opportunity. Advisers can capture clients at the SMSF establishment phase with relatively straightforward advice around tax and investment property strategies, then develop deeper, more valuable relationships as these clients’ needs evolve into complex estate planning and wealth transfer strategies.

The data on tax and retirement planning is particularly compelling – these represent the largest cluster of unmet needs, impacting nearly 300,000 SMSFs. That’s 300,000 potential clients who need exactly the type of advice most advisers are already providing to their retail super clients.

Breaking Down the Barriers

Cost remains the primary barrier for newly established SMSFs seeking advice, and this is where smart practice management comes into play. The traditional high-touch, comprehensive advice model doesn’t always fit the SMSF market, particularly for newer funds with simpler needs.

This is where the research’s finding about digital advice becomes crucial. Many SMSFs are open to receiving digital advice solutions, creating “enormous scope for delivery of scalable, low-touch solutions.” As paraplanners, we’re uniquely positioned to help advisers develop these scalable processes.

The key is building advice delivery models that can handle the volume while maintaining quality. This might mean developing SMSF-specific fact-find processes, creating template investment strategies for common scenarios, or building decision trees for typical SMSF establishment questions.

The Complexity Myth

One of the biggest misconceptions that we often encounter is that SMSF advice is inherently more complex than other forms of financial advice. Yes, there are additional compliance requirements and regulatory considerations, but the fundamental advice principles remain the same.

What makes SMSF advice complex is often the lack of proper systems and processes, not the advice itself. When we’re working with advisers who have embraced the SMSF market, they’ve typically invested in:

• Robust compliance checking systems that catch potential issues before they become problems
• Comprehensive financial modelling tools that can handle SMSF-specific scenarios like limited recourse borrowing arrangements
• Template documents and processes that ensure consistency across all SMSF clients
• Regular professional development to stay current with SMSF regulations and opportunities

The Business Case is Clear

The average SMSF has significantly more assets than the average retail super fund, which typically translates to higher advice fees. More importantly, SMSF clients tend to have more complex overall financial situations, creating opportunities for comprehensive wealth management relationships.

The research shows that SMSFs using advisers are more likely to identify sophisticated advice needs around estate planning and intergenerational wealth transfers. These are typically high-value advice areas that justify premium fees and create long-term client relationships.

From a practice management perspective, SMSF clients also tend to be more engaged with their financial affairs. They’ve made the conscious decision to take control of their superannuation, which often translates into higher engagement with the advice process and better implementation of recommendations.

Looking Forward: The Digital Opportunity

The research’s findings about digital advice appetite shouldn’t be ignored. This doesn’t mean replacing personal advice with robo-advisers, but rather finding ways to deliver efficient, scalable solutions for common SMSF scenarios.

We’re seeing progressive advisers develop hybrid models that combine digital fact-finding and preliminary advice with personal consultation for complex decisions. This approach allows them to serve the growing market of new SMSF trustees cost-effectively while maintaining the personal touch that builds long-term relationships.

The technology exists to support sophisticated SMSF advice delivery. Comprehensive compliance checking, scenario modelling for limited recourse borrowing arrangements, and automated document generation are all readily available. The question isn’t whether advisers can deliver quality SMSF advice efficiently – it’s whether they’re willing to invest in the systems and processes to do so.

The Bottom Line

The SMSF market represents one of the clearest growth opportunities in financial services today. With only 24% of funds currently using advisers and 34% of unadvised funds planning to seek advice, we’re looking at potentially doubling the advised SMSF market in the coming years.

For advisers sitting on the sidelines, the question isn’t whether to enter the SMSF market – it’s how quickly they can build the capability to serve it effectively. The trustees are ready, the demand is there, and the technology exists to deliver scalable solutions.