Aussies have yanked more than $13 billion out of the nation\u2019s biggest super funds in the past 12 months and slapped it into self-managed systems in a colossal shake-up of the retirement system that could leave many of them at risk of losing it all.<\/p>\n
Bombshell new analysis by Elula, an Australian-owned AI software company focused on customer retention and engagement in the financial services industry, shows the exodus to self-managed fund accounts (SMSFs) has nearly doubled compared with the previous financial year.<\/p>\n
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In 2025, SMSFs captured just 10 per cent of switchers. Over the previous year, it has rocketed to 17 per cent, marking an accelerating trend towards self-directed retirement management.<\/p>\n
Josh Shipman, co-founder and Chief Executive Officer at Elula, said the data shows the SMSF movement has shifted from retail-led to industry-led.<\/p>\n
Industry funds are giant, profit-for-member funds (like AustralianSuper or Hostplus), whereas retail funds are run by financial institutions or banks (like AMP).<\/p>\n
Mr Shipman said the large \u201cdefault-scale funds\u201d \u2014 the giant, trusted market-leaders \u2014 are now facing a \u201cgrowing self-directed member exit problem\u201d.<\/p>\n
\u201cFor large super funds, the warning sign isn\u2019t the dollars alone. It\u2019s that more members are actively choosing self-management,\u201d he said. \u201cWhen billions of dollars are leaving professionally managed funds for SMSFs, it raises important questions about engagement, trust and member expectations.\u201d<\/p>\n
Why Aussies are switching to DIY funds <\/p>\n
According to Elula, Aussies are making the switch for three main reasons. <\/p>\n
Firstly, they want direct control over where their retirement savings are invested, including individual shares, ETFs, property, private investments and alternative assets. SMSFs provide greater flexibility than many large super funds.<\/p>\n
Secondly, they feel they could achieve better outcomes by managing investments themselves or working with a trusted adviser.<\/p>\n
Thirdly, they feel most funds do not engage with their members, or if they do, it\u2019s generic. A lack of personalised engagement, or feeling disconnected from a fund provider, leads members to explore alternative paths.<\/p>\n
Mr Shipman said artificial intelligence is becoming a critical capability for superannuation funds and many Aussies are making a switch because of it.<\/p>\n
\u201cWith millions of members and billions of dollars under management, it is no longer practical to rely on broad-brush engagement strategies,\u201d he said. \u201cFunds need to identify which members are at risk of leaving, understand why, and engage them with the right message at the right time.<\/p>\n
\u201cThe industry is moving from reactive retention to proactive retention, and AI is the technology making that possible.\u201d<\/p>\n
\u201cIn a world where more than $13 billion is walking out the door to SMSFs each year, retention can no longer be treated as a back-office function. The funds that use AI to understand, engage and retain members proactively will be the funds that win.\u201d<\/p>\n
Couple loses it all<\/p>\n
Elula says many Aussies are going it alone because they are attracted by the perceived benefits of control without fully appreciating the administrative burden involved.<\/p>\n
Running an SMSF requires ongoing compliance, record keeping, annual financial statements, independent audits, tax returns and trustee responsibilities.<\/p>\n
While SMSFs can be cost-effective for larger balances, many members are surprised by the ongoing expenses associated with administration, accounting, audit, tax and regulatory compliance.<\/p>\n
Unlike retail or industry super funds, you or any other trustees are responsible for running the fund, making decisions about the fund, and making sure the fund remains compliant.<\/p>\n