FEATURE: Cryptocurrency, control and confidence

For much of Australia's compulsory superannuation era, investing for retirement has been built on a quiet understanding: contribute consistently, trust professional fund managers and allow time to do the work.

For a growing number of younger Australians, that understanding is beginning to fracture.

Rather than relying solely on traditional superannuation funds, increasing numbers are establishing self-managed superannuation funds (SMSFs) to gain exposure to cryptocurrency and other digital assets, an investment class that remains largely absent from APRA-regulated super funds.

The shift is unfolding against a backdrop of worsening housing affordability, subdued wage growth and growing scepticism that conventional pathways to wealth will deliver the financial security previous generations enjoyed.

The movement has sparked a broader debate, extending well beyond cryptocurrency itself.

Is this the emergence of a generation taking unprecedented ownership of its retirement savings, or evidence that an expanding advice gap is pushing younger Australians towards increasingly complex and concentrated investment decisions without the support of licensed professionals?

Recent research from the Association of Superannuation Funds of Australia (ASFA) suggests the latter concern cannot be dismissed.

Its national survey of 1500 found people aged between 18 and 34 are 10 times more likely than Australians over 65 to consult social media for retirement information, even though social media remains the least trusted source of retirement guidance across every age group. Equally concerning, only half of Australian adults have sought any retirement information at all.

For ASFA chief executive Mary Delahunty, the findings point less to a crisis of trust than one of accessibility.

"Australians know which sources of retirement information they can rely on," Delahunty says.

"The problem is that the sources they trust most are often the hardest for them to reach."

She argues the barriers are structural.

"Barriers like the cost of accessing an adviser outside of super, and limitations on the scope of advice that can be provided by super fund advisers, really get in the way of people getting the trustworthy information they need."

Those barriers appear to weigh most heavily on younger Australians, many of whom are navigating their first investment decisions while facing an economic landscape markedly different from that experienced by previous generations.

"These access problems are worst for younger Australians, who are turning to social media for information even though they trust advisers much more as a source of information," Delahunty says.

She adds this is a "strong signal to the industry and policymakers that the current settings mean advice isn't reaching young people where they are in life."

The findings coincide with the Australian financial advice profession continuing to contract.

According to ASFA, the number of licensed financial advisers has fallen by around 40% over the past decade, even as the number of Australians holding superannuation accounts has continued to grow. For younger members, whose retirement balances have decades to compound, the consequences of navigating those decisions without quality advice can be significant.

ASFA estimates that for a typical 30-year-old earning an average wage, improving annual investment returns by just a quarter of a percentage point could translate to around $40,000 more at retirement.

The advice gap, however, is increasingly being filled elsewhere.

Financial Advice Association Australia (FAAA) chief executive Sarah Abood says social media has transformed not only how younger Australians access financial information, but also how frequently it is delivered.

Exploring the impact and influence of algorithms, Abood notes: "They've become very influential because their messages get served very frequently to people and you only have to click on one. Then all of a sudden, your whole feed is filled with messages about these products."

Unlike licensed financial advisers, however, algorithms make no distinction between qualified professionals and individuals promoting products for commercial gain.

"The algorithm doesn't care if the person serving that message is qualified or has any good basis for offering that information," she says.

"That person might have conflicts. They might be being paid by providers and not disclosing that. They might even be deliberately trying to offload products themselves."

The result, she warns, is an online ecosystem where education, marketing and financial advice increasingly blur together.

Abood admits there are "good influencers," but it's hard for a consumer to discern someone who provides good and information versus someone trying to make a quick buck. The distinction becomes particularly significant when investment losses occur.

"If you act on one of those posts and invest your money in something that subsequently fails, you've got no comeback," she says.

For Abood, the challenge is not simply cryptocurrency. History, she notes, has never lacked speculative investment booms.

"I think, as humans, we've always been vulnerable to get-rich-quick schemes."

What has changed is the speed and sophistication of with which those messages are now spread.

"Social media turbocharges that appeal," she says, noting that a lot of ads play on people's fears that they could be missing out. Furthermore, financial pressure may only amplify that vulnerability, potentially prompting people to take on unnecessary risks.

For many younger Australians, cryptocurrency is no longer viewed simply as a speculative asset. Instead, it has become part of a broader reassessment of how wealth is built in an economy where home ownership feels increasingly unattainable, wage growth has remained subdued and traditional investment pathways appear less certain than they did for previous generations.

Those structural pressures are reshaping not only investment preferences but retirement planning itself.

Industry participants say the demographic profile for SMSFs is changing rapidly.

Speaking at the digital economy conference on the Future of Wealth Creation: Crypto on the SMSF Frontier, Super Concepts chief executive Andrew Row says around half of new super trustees are now under the age of 45, reflecting growing demand from younger Australians seeking greater control over their retirement savings and investment choices.

Fox & Hare financial adviser Callum Newell says housing affordability has fundamentally changed how younger Australians think about building wealth, pushing many to feel "much more comfortable renting for longer now."

"So, that naturally makes them look at other avenues," he says.

Working with both younger Australians and retirees, Newell says the generational divide has become increasingly apparent.

The younger generation is increasingly looking to invest in alternatives outside the home, particularly because those in Sydney, for example, find the city quite expensive to live in. While cryptocurrency has attracted growing interest, Newell says the bigger challenge for younger Australians is ensuring they begin investing at all, encouraging others not to be idle with their money.

"We can't just be spending everything on living expenses and rent; there needs to be some sort of long-term plan," Newell says.

His observations reflect a broader shift playing out across Australia's retirement system.

John O'Loghlen, managing director of Coinbase APAC, says younger Australians are approaching retirement investing differently because the broader economic landscape has changed.

"I think there's a number of macro forces, and particularly local Australian forces, that are driving this," O'Loghlen says.

While digital assets have become a mainstream asset class in Australia, he argues the trend extends well beyond cryptocurrency itself.

"Gen Y, Gen Z and even Gen X are a lot more active investors," he says.

"Investors are increasingly learning by doing and looking to be more actively involved with their investment portfolios, as opposed to outsourcing it all to traditional big super."

Housing affordability, he says, continues to feature prominently in conversations with customers considering SMSFs.

"There is definitely a narrative we hear from lots of customers around the idea that we've been priced out of the market," O'Loghlen says.

"So why don't we look at an asset class that could give us better returns over time?"

For many younger investors, establishing an SMSF is less about speculative trading than building wealth over decades. O'Loghlen estimates this to be between a 20- to 40-year time horizon.

"These people are doing it with a very long-term view in terms of, 'How I can maximise the returns I get from my wealth'."

He believes the movement reflects both growing confidence among younger investors and declining confidence that traditional retirement investing alone will produce the outcomes previous generations experienced.

"I think it's probably a little bit of both," he says.

Rather than rejecting superannuation altogether, many younger Australians are seeking greater autonomy over how part of their retirement savings is invested.

"They want to make sure they can get access to asset classes that give them strong returns over time," O'Loghlen says.

"They don't want to be reliant on the possible underperformance of big super funds in the long term."

That desire for greater control is not unique to cryptocurrency. O'Loghlen likens the trend in the rise of exchange-traded funds (ETFs), which democratised investing by giving retail investors easier access to diversified markets.

"People don't want to miss out on opportunities," he says.

Yet greater engagement also brings greater responsibility. As more Australians assume direct control over their retirement savings, the challenge shifts from simply accessing investment opportunities to understanding how those opportunities should be managed within a long-term retirement strategy.

As digital assets become more embedded within Australia's financial system, industry participants argue the conversation is shifting beyond speculation towards infrastructure, regulation and investor protections.

BTC Markets chief commercial officer Paul Stonham says cryptocurrency markets have matured significantly over the past decade, with the availability of long-term market data allowing investors to assess digital assets using many of the same analytical tools applied to traditional investments.

"Five or six years ago these assets weren't really being considered by professional traders or longer-term investors because there was no data," Stonham says.

This article is featured in Financial Standard's fortnightly newspaper Volume 24 Number 14. To keep reading click here. To subscribe, sign up here.