Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 345

SMSFs have major role but not for everyone

The marketplace for the whole superannuation system and for financial advice and SMSFs is highly dynamic. All the major banks are moving away from directly providing wealth management activities and owning major dealer groups. This will lead to an increased reliance on smaller dealer groups and self-licenced advisers to meet advice needs.

Only a few major groups, including AMP and IOOF, remain committed to the provision of financial advice as part of their overall offering to customers. There is much interest in how successful the future strategies of these groups will be, as other parts of the financial system step up to fill the gaps.

Expansion of choices

One interesting move is the offer by industry funds, such as Hostplus, to SMSFs to use some of their investment options without needing to become members. We support the continued expansion of investment options, especially in the infrastructure and alternative investment categories, to SMSFs. We are strong believers in choice and competition and believe the whole superannuation system will benefit from continued expansion in choice in competition.

We strongly believe that SMSFs are an appropriate vehicle for a large number of Australians but not for everyone. Hence, we should make it as easy as possible for those who wish to use an SMSF, where it is appropriate, to do so. We should also make it as easy as possible for those who choose to shift from their SMSF to a large superannuation fund to do so.

Looking at projections for the whole superannuation system, such as those prepared by Deloitte, it is likely that the SMSF sector will continue to grow strongly in absolute terms over the next decade or two, but its share of overall system assets may reduce. Many existing SMSFs are in the drawdown phase and the overall age of SMSF members is significantly higher than for large super funds.

We do not subscribe to the view that there is a contest between different parts of the superannuation system to be the largest part. Our aim is to ensure that the SMSF sector remains attractive for those Australians who seek greater control of their own financial destiny in conjunction with their advisers or via their own management of their SMSF. We do not seek a particular market share. That should be the outcome of people exercising their choice in a competitive market. Our role is to help encourage the SMSF sector to maintain high integrity, high levels of efficiency and strong professional standards, so that an SMSF remains an attractive and viable choice for many Australians.

Many of the issues now facing the SMSF sector, with a high proportion of members in the drawdown phase, will be faced by large superannuation fund members over the decades ahead. These issues include estate planning, dealing with cognitive decline, managing low real rates of return on defensive assets and dealing with longevity risk. To date, most large funds are focused on optimising their operations during the accumulation phase. There will need to be a shift towards optimising how the funds operate in the drawdown phase for the members.

Many ongoing impacts of the Royal Commission and Productivity Commission recommendations will take several years to work through the system. The impact of the Retirement Income Review will be important but is more uncertain, given the nature of the review is to develop a fact base rather than a list of recommendations.

The Review Panel has put a long list of important questions in front of the Australian community. Many of these questions have been asked from time to time over the past 30 years and we are still grappling as a community to provide answers to such basic questions as what is the goal of the retirement income system, including superannuation, age pension and voluntary saving, including my home ownership.

Addressing unmet advice needs

One of the most important concerns is the level of unmet financial advice that will make it much more difficult for people to plan for their retirement and to execute those plans with a degree of confidence. The level of complexity in the system and the continued volatility in investment markets where most of the risk sits with the individual member produces much stress for retirees.

Some longevity protection is provided by the age pension for those with modest assets at retirement or at older ages but for many retirees it is very difficult to share or manage their retirement risks.

The future role of financial advice regulation is crucial. We believe that a more customer-centric advice framework is needed, where consumers can receive trusted and professional advice.

Consumers really want affordable advice, delivered with the help of sophisticated technology, via a system of open superannuation similar to the open banking environment with clear consumer data rights. Important thinking is underway via the Senate select committee on fin-tech and reg-tech, chaired by Andrew Bragg, and many interesting ideas have already been put to the committee in the first round of submissions.

We expect market dynamics will continue to evolve and the financial advice profession will gradually look more like a medical profession, where regular health checks can be undertaken using real-time data that is readily available for consumers and can be shared with their advisers. Efficient initial advice could be more like a half-hour discussion with the doctor reviewing the results of general blood tests and measurements of height, weight, blood pressure, family history, rather than requiring extensive manual data gathering and days of manual analysis and report preparation that is primarily focused on risk mitigation for advisers, rather than value adding for consumers.

Of course, we do not want to reduce any of the consumer protections provided by the existing regulatory frameworks, but mechanisms are needed whereby most Australians can have access to affordable advice with significant trust in the system.

This will require continued advancements in technology, rebuilding of trust from all participants in the financial system and from focusing on what is in the best interest of the consumer in reality rather than in theory. Protecting retirement savings and financial health of all Australians is at the forefront regardless of which forms of retirement savings are chosen.

 

John Maroney is CEO of the SMSF Association. This is an edited transcript of a speech given for Pritchitt Partners on 23 January 2020.

 

  •   19 February 2020
  •      
  •   

 

Leave a Comment:

RELATED ARTICLES

Three financial advice changes nobody is talking about

Why Westpac walked away from advice

Roboadvice's role in financial advice’s future

banner

Most viewed in recent weeks

3 ways to fix Australia’s affordability crisis

Our cost-of-living pressures go beyond the RBA: surging house prices, excessive migration, and expanding government programs, including the NDIS, are fuelling inflation, demanding bold, structural solutions.

Making sense of record high markets as the world catches fire

The post-World War Two economic system is unravelling, leading to huge shifts in currency, bond and commodity markets, yet stocks seem oblivious to the chaos. This looks to history as a guide for what’s next.

Is there a better way to reform the CGT discount?

The capital gains tax discount is under review, but debate should go beyond its size. Its original purpose, design flaws and distortions suggest Australia could adopt a better, more targeted approach.

How cutting the CGT discount could help rebalance housing market

A more rational taxation system that supports home ownership but discourages asset speculation could provide greater financial support to first home buyers.

Welcome to Firstlinks Edition 648 with weekend update

This is my last edition as Editor of Firstlinks. I’m moving onto a new role though the newsletter will remain in good hands until my permanent replacement is found.

  • 5 February 2026

It’s economic reality, not fear-based momentum, driving gold higher

Most commentary on gold's recent record highs focus on it being the product of fear or speculative momentum. That's ignoring the deeper structural drivers at play. 

Latest Updates

Superannuation

Super is catching up, but ageing is a triple-threat

An ageing Australia is shifting the superannuation system’s focus from accumulation to the lifecycle of retirement. While these pressures have been anticipated for decades, they are now converging at scale and driving widespread industry change.

Investment strategies

Corporate earnings show resilience against volatility but risks remain

Evidence for a strong reporting season had been piling up for months and validated an upgrade cycle already underway. However, risks remain from policy uncertainty.

Superannuation

Want your loved ones to inherit your super? You can’t afford to skip this one step

One in five Australians die before retirement and most have not set up their super properly so their loved ones can benefit from all their hard work and savings. 

SMSF strategies

Sixteen steps in a typical SMSF borrowing

Getting a mortgage is never an easy process but when an investment property is purchased in a SMSF the complexity increases significantly. Read this before taking the plunge. 

Planning

Do HNWI get better advice?

Good advisers lead to more diversification, lower turnover and less home bias. However, studies show the average adviser may not be adding much value to clients. 

Strategy

AFL Final Ten with wildcard edit 'unlevels' the field

When the new AFL season kicks off a wild-card will be added to the finals. Is this new formula fair and how does it impact the odds of winning the premiership.

Planning

Love them or hate them, it's worth understanding annuities

Investors have historically balked at exchanging a lump sum for a future steam of income. Breaking down the financial and emotional considerations of purchasing an annuity.        

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.