An Australian Securities and Investments Commission (ASIC) review of 100 financial advice files has concluded that poor financial advice around self-managed superannuation funds (SMSF) establishment has placed retirement savings at risk.
ASIC said it had identified concerns that 62 files failed to demonstrate compliance with the best interests duty, with 27 files – over a quarter – raising significant concerns about client detriment relating to recommendations to set up an SMSF.
Barely a third of advice files – 38 of 100 – demonstrated compliance with the longstanding obligation for advisers to act in clients’ best interests.
Commenting on the findings, ASIC Commissioner Alan Kirkland said, “People often set up an SMSF because they think it will give them more control over their retirement savings, but they aren’t suitable for everyone.
: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.
“Financial advisers who recommend that clients establish SMSFs without properly considering whether it is suitable for their objectives, financial situation and needs, are not helping them take control of their future — they are placing it at risk.”
The SMSF sector in Australia is growing, accounting for around $1 trillion, or nearly a quarter, of the $4.3 trillion superannuation sector. In the year to June 2025, 41,980 new funds were established, an increase from 33,032 establishments the previous year.
The SMSF Association has backed ASIC’s calls for higher standards.
The ASIC report identified the following areas for advice falling short:
› not basing all judgements on clients’ relevant circumstances, including inappropriately using the notion of control to justify recommending SMSFs without exploring what control meant to the clients
› financial advisers acting as order-takers and not conducting a reasonable investigation and assessment of financial products, and
› not giving priority to the interests of clients where there were conflicts of interest, including in relation to advice to establish an SMSF to acquire off-the-plan properties through limited recourse borrowing arrangements.