SMSF or traditional fund - what’s best for you?
2025 | 5min read
A self managed super fund (SMSF) allows you to manage your own retirement savings. It requires active involvement and knowledge of investment markets, and the time to do the admin and adhere to rules and regulations.
Traditional funds vs SMSF
With a self managed super fund, it’s a much more hands-on experience compared to a traditional super fund. For some, being in complete control is an exciting prospect. Others may wish to save their time and leave the responsibility to their super fund.
Self managed super fund
Cost
There are set-up costs and fixed annual costs.
Investment knowledge
It is more likely that high investment and finance knowledge is required. If your SMSF doesn’t perform as you expect, the responsibility falls with you and your investment decisions.
Administration and regulation
High levels of time required for admin. Knowledge of SMSF regulations also required.
Insurance
Insurance premiums may be higher compared to a traditional fund due to their ability to negotiate premiums and buy in bulk
Flexibility
High - it’s your SMSF - you choose how you want to run it. If your SMSF is a victim of theft or fraud, you aren’t entitled to any compensation, unlike a traditional super fund which is protected; to some extent by APRA and ASIC regulations to protect members’ finances.
Investment opportunities
A broad range of investment opportunities are available. Large scale projects like property development, infrastructure and private investments may not be available.
Traditional super fund
Cost
Usually, no set-up fees. Annual fees are charged as a % and may be capped.
Investment knowledge
It’s more likely that only basic investment and financial knowledge is required to open and manage an account.
Administration and regulation
Low levels of personal admin required.
Insurance
Insurance premiums may be lower compared to a SMSF due to a traditional fund's ability to negotiate premiums and buy in bulk.
Flexibility
There is still plenty of flexibility, with a broad range of investment options to choose from, including products that keep your money invested and pay yourself an income in retirement.[M5]
Investment opportunities
Large scale investment opportunities that are only available to larger super funds, like property development, infrastructure and private investments that may not be available to smaller super funds and SMSFs.