This information is general in nature and does not take into account your objectives, financial situation or needs. Consider whether it is appropriate for you.
If you’ve started exploring superannuation, you’ve probably come across the term SMSF, short for Self-Managed Super Fund. They’re a meaningful part of the Australian super system: as of December 2025, there are 663,867 SMSFs in Australia, holding around A$1.06 trillion in assets between them. That’s roughly a quarter of the country’s entire superannuation pool.
A record 42,293 new Self-Managed Super Funds were established in Australia during the 2024-25 financial year, the highest annual total on record according to the ATO. Nearly half (49%) of new SMSF members were aged 25 to 44, with the 35 to 44 cohort alone making up 39%. That’s a structural shift in how a generation thinks about retirement, and shows more Australians want a say in where their money goes.
So what actually is an SMSF, and how does it work?
What is an SMSF?
A Self-Managed Super Fund is a private superannuation fund you run yourself, regulated by the Australian Taxation Office (ATO). Like any super fund, it exists to provide retirement benefits to its members.
The difference is in the structure. With a retail or industry fund, your money is pooled with millions of other members, and a fund manager makes the investment decisions on your behalf.
With an SMSF, you and the other members are the trustees. You and they decide the investment strategy, you choose the assets, and you’re legally responsible for running the fund.
It’s superannuation, but with full control over how your money is invested.
Members and trustees: what’s the difference?
These two terms are often used interchangeably, but they’re not the same thing.
Members are the people whose super is held in the fund. An SMSF can have between one and six members. Most have one or two, often a couple, such as spouses or siblings, but the rules also allow extended families to pool their super into a single multigenerational fund (a change introduced in 2021).
Trustees are the people legally responsible for running the fund. In an SMSF, all members must be trustees (or directors of the corporate trustee). That overlap is the whole point: it’s what makes the fund “self-managed”.
There are two ways to structure the trustees:
-With individual trustees, each member is a trustee personally.
-With a corporate trustee, a company acts as trustee, and the members are its directors.
According to ATO statistics, roughly 70% of newer funds choose the corporate structure for cleaner governance and easier handling of membership changes.
Who can be a member or trustee?
To be a trustee or director of a corporate trustee, you must be at least 18 years old, mentally capable, and not a disqualified person. A person is disqualified if they have ever been convicted of a dishonest offence (such as fraud), are bankrupt or insolvent, or have been previously disqualified by the ATO, ASIC, or APRA. You also can’t have outstanding tax debts or unlodged returns.
For most people this isn’t an issue, but it’s worth being aware of, particularly because the disqualification rules apply for life and aren’t specific to a single fund.
The residency requirement
Your SMSF must be an Australian super fund at all times during the financial year to qualify for super tax concessions.
To meet that test, the fund needs to satisfy three conditions:
- It must be established in Australia (or have at least one asset held in Australia),
- Its central management and control must be based in Australia
- If the fund has any “active members” (members who are contributing or having contributions made on their behalf), at least 50% of the fund’s value attributable to those active members must be held by Australian residents.
If you or other members are likely to spend extended periods overseas, this is something to talk through with an administrator or adviser before setting up the fund.
What can an SMSF invest in?
This is where the appeal really starts to show. Where retail and industry funds offer a menu of pre-selected investment options, an SMSF can hold almost any asset the law allows.
Common holdings include:
- Australian and international shares
- ETFs (local and global)
- Crypto assets
- Residential and commercial property
- Real Estate Investment Trusts (REITs)
- Cash, term deposits, and bonds
- Commodities
The mix is up to the trustees, subject to compliance rules and the fund’s written investment strategy. For many Australians, the ability to access global markets, alternative assets, and direct shares is the main reason for setting up an SMSF in the first place.
Is an SMSF right for you?
An SMSF isn’t a default upgrade from large APRA funds. It’s a different model entirely, with real benefits and real responsibilities. Whether one suits you depends on your balance, your investment goals, your appetite for engagement, and your willingness to take on trustee responsibilities.
If you’re wondering whether an SMSF is the right move for you, our guide on “Is an SMSF right for you?” walks through an honest checklist of the questions worth asking yourself first.
How do you set up an SMSF?
If you’re seriously considering an SMSF, one of the most valuable things you can do is talk to a professional before committing. Structuring the fund correctly from day one is what saves you time, tax, and stress down the track.
Already have an SMSF? Eligible SMSF clients can earn up to USD$30,000 cashback on net deposits (new customers only; a minimum USD$10,000 deposit is required to open an eToro SMSF account, with terms and conditions applying).
Book a call with the team to discuss the next steps of taking control of your retirement.
Don’t have an SMSF yet? eToro has partnered with Intello, one of Australia’s leading SMSF administrators, to offer eToro clients a discounted setup fee of A$990 and up to 20% of administration and account fees based on your eToro Club tier.
This guide has been put together with insights from Intello.com.au
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