New SMSF trustees drive financial advice uptake

Trustees of newly established self-managed super funds (SMSFs) are behind a surge in the uptake of financial advice, according to a Vanguard/Investment Trends SMSF report.

The report, while showing that adviser influence is growing in new SMSF set-ups, however, indicates that the broader SMSF population still has significant advice needs.

The number of SMSFs using advisers grew from 140,000 in 2023 to 155,000 in 2024.

Despite this growth, most of the sector remains without an adviser.

Vanguard Australia chief of personal investor Renae Smith said although Australia's SMSF sector is continuing to grow, the research for this year's report highlights that there are significant advice gaps for many individuals operating their own super fund.

"Only 24% of SMSFs currently use a financial adviser, which is not ideal when you think of the many complexities associated with managing superannuation including keeping track of changes in rules and regulations, administration, taxes, choosing what to invest in, and then personal considerations such as retirement income needs and estate planning," Smith said.

The research found that advised SMSFs are more likely to report advice gaps around intergenerational wealth transfers (29%) and estate planning (37%), while newly established SMSFs are far more focused on tax minimisation (37%), insurance (26%), and purchasing an investment property (25%). Tax and retirement planning represented the largest cluster of unmet needs, impacting nearly 300,000 SMSFs.

Barriers to advice remain complex, the report said, noting that cost stands out as the primary hurdle for newly established SMSFs.

For advised SMSFs, a lack of holistic advice was increasingly cited.

"On the bright side, the research found that 34% of unadvised SMSFs now plan to seek financial advice, which is up from 25% the year before. But this percentage needs to grow," Smith said.

The latest research also found that many SMSFs are open to receiving digital advice, highlighting the "enormous scope for delivery of scalable, low-touch solutions."