Then there are the highly visible advisers running aggressive, cookie-cutter businesses fronted by social media, “masterclasses” and relentless advertising. Many have slick offices, glossy feeds and an endless stream of self-congratulation about their “success stories”, often backed by a wall of dubious industry awards.
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They’re particularly skilled at appealing to middle-aged Australians heading into their pre-retirement growth years – people, often men, who don’t want to miss out on the next big opportunity.
I constantly see these campaigns. I’ve even signed up for a few, just to see what happens next. The marketing is slick, the sales funnel perfectly engineered to draw you in. To the average person looking for better returns, it probably just looks professional and persuasive.
It looks legitimate enough from the outside. But ASIC’s review stripped away the gloss and showed what’s really going on: some advisers are handing out near-identical advice, churned out like a production line.
Clients are told to set up an SMSF, roll over their super from a major fund (that might well have long-term returns of 8 to 10 per cent), buy a property or other investments managed through a related asset management company, and watch their wealth “grow”.
It’s a beautifully repeatable business model for the adviser and their parent company, but that’s not personal advice. It’s a production line, and it’s incredibly profitable.
ASIC found that financial advisers were funnelling SMSF owners into poor investments.Credit: Getty Images
ASIC has called this out too. Its report highlights advisers acting like order-takers, rubber-stamping SMSFs that were never suitable in the first place. These aren’t small mistakes; they’re systemic failures.
And it doesn’t stop with advisers. ASIC found that SMSF auditors are part of the problem too, taking action against dozens for independence breaches, poor oversight and failing to meet professional standards.
Property appears to be the big driver behind much of the bad advice, but it wasn’t the only area to be concerned about. In 57 of the 100 files that ASIC reviewed, the SMSF involved a direct property purchase, and in 50 cases it included a borrowing arrangement. ASIC also warned about advisers recommending investments tied to their own firms.
Now, other layers of risk are emerging. First, the growing appeal of private credit as an asset class. The playbook feels eerily familiar, like something straight out of a decades-gone era.
Roll your super into an SMSF, gear up your investments and channel the money into a property development or mezzanine-lending fund that promises steady, double-digit returns.
On paper, and at the Saturday barbecue, it sounds “professional-grade”. In reality, it’s often the same high-risk strategy, repackaged for a new cycle, and there are rivers of money flowing in fees through the back room at every step.
At the same time, many wealth firms are expanding beyond advice into asset management – running their own funds and investment vehicles. That means the adviser recommending an investment may also work for, or have a stake in, the asset management company managing it.
It’s a model that blurs the line between advice and product promotion, creating conflicts that need to be acknowledged and managed. ASIC’s report made that point clear: advisers must prioritise their clients’ interests above their own or their licensee’s.
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The reality is that an SMSF just isn’t right for most people any more. The dominant use now tends to fall into two camps: business owners who want to buy their premises and lease it back to themselves, and investors chasing high-risk geared strategies.
For everyone else, the costs, complexity and risks usually outweigh the benefits. And frankly, there are simpler options – in the well managed retail platforms that now exist and are used by advisers prolifically to access good investments.
When you add in fund establishment fees, property syndicate commissions, ongoing admin costs, auditor fees and asset management charges, it’s easy to see why ASIC keeps saying that SMSFs can be more expensive than people realise. For smaller balances, especially, the cost-to-return ratio can be disastrous.
So for everyday people, easily drawn in by the promise of making more money, what can you do to avoid ending up in a cookie-cutter advice and SMSF model?
Ask questions early and be observant. If someone suggests an investment approach early in your relationship, be wary. It’s often a sign that you’re being set up for a cookie-cutter sell. A good adviser should start by understanding you: your goals, lifestyle, balance and comfort with risk. If they jump straight to products or strategies, that’s your first red flag. Follow the money. See if they have a “standard” approach, the same investment solution rolled out for everyone. Then check who’s getting paid, and how. Is your adviser (or their parent company) connected to the product, platform or property being recommended? Their Financial Services Guide (FSG) will tell you, and if it’s difficult to find, read or full of jargon, that tells you something too. Don’t be dazzled by marketing. Polished videos and “exclusive opportunities” are designed to create urgency and FOMO. Real financial advice should slow you down, not speed you up. Compare costs. SMSFs can be expensive. Ask for a clear comparison between your current super fund and the SMSF option, with all fees included. If it’s not saving you money or offering genuine flexibility, walk away. Keep your insurance in sight. Many people lose valuable life or disability cover when they leave an industry or retail fund and don’t realise it until it’s too late. Make sure you understand what protection you’re giving up. Remember: control isn’t always freedom. Having an SMSF doesn’t automatically mean you’re “in control” of your money. It means you’re legally responsible for compliance, investments and outcomes. Be sure you actually want that job. There are even advice firms now specialising in unwinding SMSFs for people who’ve had enough of the complexity.
And finally, if you’re considering an SMSF, read this carefully. It comes straight from ASIC:
“SMSF trustees should be aware of the associated costs, responsibilities and risks. People who move their super from an APRA-regulated fund to an SMSF also lose important protections, including the benefits of prudential regulation and the ability to make a complaint about the fund or its trustees to AFCA.”
It’s a powerful reminder that “control” can come at a cost.
To the good advisers out there – please, speak up. The cowboys are giving you a bad name, and you don’t deserve it. Shut down the lead funnels, talk openly about what good advice looks like, and help us help consumers to find it, even if you don’t have the capacity right now to take them on.
For the rest of us? Stay curious, ask questions, and find your advisers through your own trusted networks and circles. That’s still the best defence against bad advice.
Bec Wilson is author of the bestseller How to Have an Epic Retirement and the newly released Prime Time: 27 Lessons for the New Midlife. She writes a weekly newsletter at epicretirement.net and hosts the Prime Time podcast.
Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that considers their own personal circumstances before making financial decisions.
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