The true cost of an SMSF

Cost can be one of the biggest differentiators between running your own self-managed super fund (SMSF) or staying in a retail or industry super fund, so it’s important to do a thorough comparison before you decide.

With an SMSF, you don’t have to pay administration fees like you do to an APRA-regulated super fund. Instead, you have to pay to set up and manage your SMSF, which includes making sure your SMSF is compliant and doesn’t breach any SMSF rules.

Here we outline the costs of setting up a self-managed super fund so you know what to expect.
 

• Set up costs
• Annual accounting and auditing costs
• Investment research and financial advice
• Insurance premiums
• Typical annual costs for an SMSF
• Comparing costs to a large super fund
• Don't forget to account for your time

Set up costs

The first year of managing an SMSF is usually the most expensive. This is because you need to spend time and money to make sure you establish the fund correctly. This includes registering with the Australian Taxation Office (ATO), creating your trust deed and investment strategy, and setting up your SMSF on whichever investment platform you decide to use.

If you want to have corporate trustees instead of individual trustees for your SMSF, you will also have to register with the Australian and Securities Investment Commission (ASIC) and meet ongoing obligations.

If you pay for the set-up costs personally, you may be able to claim a reimbursement from your SMSF.

There are companies you can pay to manage the set-up process for you. Do your research first to make sure they’re a reputable provider, because there are a lot of super and SMSF scams targeting Australians.
 

Annual accounting and auditing costs

It’s a requirement to lodge a tax return for your SMSF every year if your fund holds assets. Your SMSF must also be audited every year by an approved SMSF auditor.

These accounting and auditing tasks are essential to keeping your SMSF compliant. If you miss your lodgement or audit date, you may have to pay a steep fine. It could also result in losing your concessional tax status or disqualification as an SMSF trustee.

Depending on the complexity of your fund, you may want to consult a professional tax adviser to complete your return or explore tax minimisation strategies. 

Need to understand more about the obligations of SMSFs? Read our article, With control comes responsibility

Investment research and financial advice

You don’t have to outsource the investment research for your SMSF if you would prefer to do it yourself. However, researching and regularly reviewing investments is one of the most important parts of managing an SMSF.

Your investment strategy must consider the risk tolerance and retirement goals of every member in the fund. It’s also important to keep your portfolio well diversified to help reduce risk and manage market fluctuations. There are also strict rules you have to follow about what SMSFs can and can’t invest in.

Getting professional advice from a financial adviser who specialises in SMSFs can make a world of difference to the success of your fund. They can assist with setting up your fund, keeping on top of changes in rules and regulations, identifying new investment opportunities, and conducting estate planning as members near retirement.
 

Insurance premiums

Insurance premiums can be higher in an SMSF compared to a retail or industry super fund because you have your own insurance policy instead of being part of a super fund’s group insurance policy. Super funds negotiate discounts on their group insurance premiums with the insurer, which tends to make them cheaper for the fund’s members compared to a standalone policy.
 

Typical annual costs for an SMSF

SMSF costs can vary considerably based on the balance and complexity of the fund, however we can look at averages and medians to estimate how much you may need to budget for.

The ATO publishes average and median SMSF operating costs each financial year. The latest available figures are for the 2023/24 financial year.²

The ATO also publishes average total expenses. This includes operating costs as well as interest expenses for borrowings, insurance premiums, investment expenses and compliance expenses. The numbers below are from the same data set for the 2023/24 financial year.

SMSF with a balance between $200,000 and $500,000

SMSF with a balance between $500,000 and $1 million

Many of the ongoing expenses are tax-deductible to the SMSF, unless they’re capital in nature. Keep in mind that any deductions will reduce the fund’s ability to achieve net returns.
 

Comparing costs to a large super fund

While the choice and control of an SMSF can seem appealing, many may not consider the costs. Large super funds like Mercer Super charge administration fees to cover the costs of running your account – everything from setting up your account and processing transactions, complying with regulatory requirements, to the continuous improvements we make to your digital experience.

These fees, along with insurance premiums are deducted from your balance, so there are no out-of-pocket expenses.

While the fees outlined for SMSFs should be taken as a guide based on available data, super fund fees are fixed and must be clearly outlined in a super plan’s Product Disclosure Statement, and any significant product changes communicated to all members through a Significant Event Notice. 

To help compare the costs, we’ve tabled the average total fees and costs assessed by Chant West across a range of MySuper balances below. Chant West is a research provider that benchmarks APRA-regulated super funds’ average fees and performance each quarter.

*Analysis completed based on ChantWest MySuper Default Fee Tables December 2025. Fees and costs can vary from year to year. Past fees and costs are not a reliable indicator of future fees and costs. Fees and comparisons may differ for other investment options and account balances.
 

Don’t forget to account for your time

SMSF trustees spend more than eight hours each month managing their SMSF, on average (Investment Trends, SMSF Investor Report, April 2021). On top of the costs we’ve already looked at, put a dollar figure next to your time and think about how much that adds up to over the course of a year.

While some people enjoy the administration and responsibilities of running an SMSF, the ongoing financial obligations can sometimes be an unwelcome surprise, and the financial stress can be considerable if your SMSF doesn’t perform the way you want it to. Make sure you know what you’re getting into before you jump into opening an SMSF so you can make an informed decision about what’s best for your long-term financial goals.