SMSF vs Industry Super Fund (2025 Update) — Fees & Returns Compared
TL;DR Summary (5 key points)
- Industry super funds generally offer lower hassle and strong average returns (around 7–8% p.a. over 10 years).
- SMSFs give full investment control but higher admin and compliance costs — better suited for balances over $300,000.
- Average annual SMSF cost in 2025: $3,800–$7,000 depending on complexity.
- Industry funds charge around 0.7–1.0% in total annual fees (investment + admin combined).
- SMSFs can outperform when well-managed but require more time, knowledge, and legal responsibility.
Concept Overview — why this comparison matters
With nearly 600,000 SMSFs in Australia and over 16 million people in APRA-regulated super funds, many Australians are weighing the pros and cons of managing their own fund. The key trade-off is control vs simplicity — SMSFs offer customisation but require time and cost; industry funds provide convenience and professional management.
Comparison Table — SMSF vs Industry Super Fund (2025)
| Feature | SMSF (Self-Managed Super Fund) | Industry Super Fund |
|---|---|---|
| Typical annual return (10-year avg.) | 7.5% (varies widely by investor skill) | 7.8% (balanced option average) |
| Annual admin/audit cost | $3,800–$7,000+ | $100–$400 flat fee |
| Investment management cost | Depends on chosen assets | 0.5–0.7% of balance |
| Total annual cost (% of balance) | ~1.2–2.0% (lower if >$500k balance) | ~0.7–1.0% |
| Minimum recommended balance | $300,000+ | No minimum |
| Investment choice | Shares, ETFs, crypto, property, term deposits | Pre-set options (Balanced, Growth, ESG, etc.) |
| Ease of setup | Complex — requires trust deed, ATO registration | Very simple — online signup |
| Control level | Full control of all assets and strategy | Limited control — managed professionally |
| Regulation & audit | ATO-regulated (annual audit required) | APRA-regulated (fund handles compliance) |
| Best for | Experienced investors with large balances | Most everyday Australians |
Who Each Option is Best For
- SMSF: Best for investors who want to directly manage property, shares, or niche assets (e.g. gold, crypto) and have >$300k to invest.
- Industry fund: Ideal for employees who prefer “set and forget” super with low fees and diversified professional management.
Step-by-Step — how to compare and switch
- Review your current fund: Check fees and 10-year performance on APRA’s MySuper performance test.
- Estimate costs: Use ASIC’s SMSF cost calculator to estimate total annual SMSF expenses.
- Compare control and effort: Decide whether you prefer professional management or self-direction.
- Seek licensed advice before setting up an SMSF, especially regarding compliance and investment strategy.
- Switch funds: You can consolidate via MyGov > ATO > Super > Transfer super.
Cost / Fees / Tax Considerations
- SMSF setup cost: Around $1,000–$2,000 (trust deed, ATO registration, corporate trustee).
- Annual audit + accounting: $1,500–$3,000 typically.
- ATO supervisory levy: $259 per year (2025).
- Industry fund fee structure: Mix of flat admin + percentage-based investment fee.
- Tax rate: 15% on earnings (both SMSF and industry), 0% in pension phase if eligible.
Decision Guide — quick selector
| Goal | Recommended Option | Why |
|---|---|---|
| Want full investment control | SMSF | Directly choose shares, property, crypto, or managed funds |
| Want low fees and easy management | Industry fund | Simple, professional, low-maintenance |
| Balance under $300k | Industry fund | Cheaper overall; SMSF costs are proportionally higher |
| Own property via super | SMSF | Allows limited recourse borrowing for investment property |
FAQ (Australia 2025)
How much does an SMSF cost per year?
Typically between $3,800 and $7,000 depending on complexity, audit, and advice needs.
What is the minimum SMSF balance to be cost-effective?
Generally $300,000+ is recommended to make SMSF fees competitive with large industry funds.
Can I buy property through my SMSF?
Yes, through a limited recourse borrowing arrangement (LRBA), but strict ATO rules apply.
Do SMSFs perform better than industry funds?
On average, large and well-managed SMSFs perform similarly to balanced industry funds over time.
Can I switch back from SMSF to an industry fund?
Yes, but winding up an SMSF can cost $500–$2,000 and takes several weeks.
Are SMSF fees tax-deductible?
Yes, most SMSF admin and accounting fees are deductible to the fund.
Sources / Official References
- ATO — Self-Managed Super Funds
- APRA — MySuper Performance Test
- ASIC Moneysmart — SMSFs Explained
- ASFA — Superannuation Industry Data
Disclaimer:
This article is for general information only and is not financial advice. Please seek advice from a licensed financial adviser or accountant before making any superannuation decisions.