SMSFs' use of advisers plummets: Research

The number of self-managed super funds (SMSFs) using advisers has reached a new low, with the proportion of SMSFs using advisers falling to 23% from 27% in the past 12 months, according to a Vanguard/Investment Trends report.

The number of SMSFs without advisers is at an all-time high of 475,000. Adviser use has dropped to an all-time low of 140,000 in 2024, down from 160,000 in 2023 and 205,000 in 2019.This decline comes at a time when the number of SMSFs without advisers and with unmet advice needs is peaking.

Only 25% of trustees without advisers are likely or very likely to seek financial advice in the future.

The top three reasons people don't seek advice are that they feel they can manage their own finances, they think advisers are too expensive, or they don't need advice right now. A bad experience with an adviser in the past is also a common reason.

Most established SMSFs get advice from accountants, while newly established SMSFs prefer advice from SMSF administrators.

Both groups, those with and without advisers, say they need help with tax and retirement strategies. They want advice on SMSF pension strategies, inheritance and estate planning, tax planning, and changes in regulations.

"These findings continue to signal the opportunities that financial advisers have in delivering advice that is suited to the needs of SMSF trustees," said Vanguard Australia chief of personal investor Renae Smith.

"It's been a longstanding view of Vanguard's that advice can help investors achieve better outcomes.

"When it comes to pension strategies, estate planning or keeping trustees well-informed about regulatory changes, who better than a financial adviser to provide guidance around these topics?"

Reflecting the growing digital world, SMSFs with unmet advice needs are increasingly expressing an interest in digital advice or digital tools with the assistance of a human adviser. The top three areas of interest are SMSF contribution strategies, investing for a regular income, and ETFs.

Conversely, the advised SMSF cohort are more likely to use digital tools when it comes to buying an investment property or investing for a regular income.