The SMSF market in 2025 — control, property and the new risk line

1) Where the SMSF market sits in 2025

Quietly, while most Australians were just letting their default super tick along in the background, self-managed super funds grew into a giant. Around a quarter of the country’s superannuation savings now sit inside SMSFs, with balances approaching the one-trillion-dollar mark, broadly in line with Australian Taxation Office SMSF statistics.

On paper, that growth looks like a vote of confidence in the DIY model. In reality, the 2025 SMSF market feels more like a split personality. On one side, you’ve got switched-on trustees using the structure for long-term strategy: sensible property, diversified portfolios, careful tax planning. On the other, you’ve got rushed setups, thin advice files, borrowed money chasing shiny off-the-plan schemes, and people taking on trustee responsibilities they don’t fully understand.

2) Why control is so attractive right now

If you strip it back, most SMSF stories I hear start with the same feeling: “I’m sick of not knowing what’s happening with my super.” People want visibility. They want control. They want to decide whether their retirement money is in shares, term deposits, direct property, precious metals or something more exotic.

Traditional funds usually give you a risk label – conservative, balanced, growth, high growth – and that’s about where the conversation ends. With an SMSF, you can choose the specific mix. That’s the upside. The catch is that you’re also choosing to deal with investment decisions, compliance, record-keeping, audits and the simple reality that markets don’t always do what you expect.

In 2025, the control pitch is even stronger because many people feel squeezed. Interest rates are higher, borrowing power in personal names is lower, and asset prices haven’t exactly fallen off a cliff. So investors start looking at every corner of their balance sheet and notice there’s a six-figure super balance sitting in the background. Naturally, they ask: “Could I be doing more with that?”

3) Advice quality and regulator heat

One of the most important shifts in 2025 isn’t the number of SMSFs – it’s the spotlight over how they were recommended in the first place. Recent reviews of advice files around SMSF set-ups found a disturbingly high proportion where advisers couldn’t clearly demonstrate that the move was in the client’s best interests.

As a broker, I see the downstream effect. People arrive with an SMSF already in place, a property already under contract, and only then start asking the deeper questions: Is this structure right for me? Do I really understand the costs? What happens if the rent drops or rates rise again? Those questions should have been front-and-centre before any paperwork was signed.

Regulators have started calling this out more bluntly. They’ve highlighted files where the “control” story was used as a catch-all justification, where product comparisons were thin, and where conflicts of interest weren’t handled properly – for example, when an SMSF was set up mainly to push a particular off-the-plan property with borrowings behind it. Much of this echoes ASIC guidance for SMSF trustees, which keeps emphasising diversification and genuinely acting in members’ best interests.

4) Property inside SMSFs – real opportunity, real leverage

Property is the lightning rod in the SMSF space. Over the past few years, many Australians who felt capped on borrowing capacity in their personal names started looking at their super as an alternative way to invest in real estate. The logic is simple enough: if your fund has, say, $150,000 in cash, and the structure allows borrowing, you can suddenly look at assets in the $500,000–$700,000 range instead of just compounding that cash in the market.

Done well – with the right asset, the right loan structure, and a realistic view of rent, costs and contributions – that can be powerful. You’re using concessionally taxed income inside the fund to grow an asset base over decades, with rental income and contributions helping service the debt.

Done poorly, it’s a slow-motion car crash. Leverage cuts both ways. A high-cost, poorly located property with thin yields can chew through liquidity inside an SMSF surprisingly quickly. You don’t have the same flexibility to just “top it up” from your personal savings if something goes wrong, and selling in a hurry from a super fund is rarely ideal. That’s before you even get to the extra documentation and lender rules that apply to limited-recourse borrowing arrangements.

5) The extra tax debate over large balances

Another 2025 talking point is the new additional tax on very large super balances. On the surface, it targets a small group of high-balance accounts. What worries many people – and what I hear often – is not the starting threshold, but the fact it isn’t indexed.

In plain English, that means the dollar figure doesn’t automatically rise with inflation or asset growth. So a level that feels “only for the very wealthy” today can quietly pull more and more people into its orbit over time. It’s one of the reasons you’re seeing sharper conversations about where and how people want to grow their wealth inside super versus outside it.

I’m not here to argue for or against that policy. The practical takeaway is this: if you’re planning to use an SMSF to build significant property or other growth assets over the next couple of decades, factor rule-changes into your thinking. Super still offers some of the lowest tax rates you’ll ever see in Australia, but it’s not a static set of rules.

6) Risk, responsibility and how much bandwidth you really have

An SMSF isn’t just a different kind of super account; it’s a different job. You (and any co-trustees) are responsible for the fund meeting the rules, documenting decisions, lodging returns, paying the right taxes and acting in the best interests of all members. The buck really does stop with you.

For some people, that’s energising. They enjoy the research, the spreadsheets, the strategy sessions with their accountant and adviser. For others, it becomes another source of stress layered on top of work, family, business and everything else. I see both types in my day-to-day conversations.

When I talk about risk in SMSFs, I’m not just talking about markets or property prices. I’m talking about behavioural risk: getting distracted, forgetting lodgements, not reviewing the investment strategy, or assuming that “it’ll all work out” without ever really checking the numbers. In 2025, with life running faster for most people, that bandwidth question is just as important as the investment question.

7) Where SMSFs actually make sense in 2025

So with all of that in mind, where do SMSFs fit best right now? I think about it in terms of alignment.

They tend to make more sense when the members:

• Have a genuine interest in investing and are willing to stay engaged over time.
• Can justify the running costs and professional fees relative to their balance.
• Have a clear strategy that goes beyond “buy one property and hope for the best.”
• Understand that control comes with obligations, not shortcuts.

They make less sense where the driver is purely fear of missing out, or where the main pitch has been a single product or scheme. If the entire conversation has been about one investment, with the SMSF bolted on just to make that investment possible, that’s a red flag for me.

8) Finance, borrowing and practical next steps

From a lending perspective, SMSF loans sit in their own lane. There are fewer lenders, more paperwork, and some very specific rules around how security is held, how repayments work and what happens if things go wrong. Many brokers never touch them. That doesn’t mean they’re bad; it just means you want to be working with people who live and breathe this space, alongside a strong accountant and, where needed, a licensed financial adviser.

If you’re curious about using an SMSF but haven’t set one up, my suggestion is simple: start with education, not a structure. Learn how the rules work, what you can and can’t do, how borrowing capacity is assessed inside a fund, and how that interacts with your broader strategy outside super. Only when those pieces line up – and the advice file genuinely reflects your best interests – should the paperwork follow.

Next step: If you’re considering SMSF borrowing, start with the SMSF Loan & Buffer Calculator, read the SMSF Property Investment Guide, then speak with an SMSF mortgage broker.

Compliance: General information only. Outcomes vary by entity, contribution pattern, investment mix and changing legislation. Final pricing, structures and approvals require full professional advice and a complete lender assessment.