major super fund or SMSF?

Running a superannuation fund is a big job. Is it something you should take on? Let's look at some of the differences of being with a major fund like HESTA versus a self-managed super fund (SMSF).

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From managing administration costs and risks to compliance with super law, it takes a lot of time, knowledge and money to run a successful super fund. And that includes SMSFs.

Here’s what the Australian Securities and Investments Commission's (ASIC) MoneySmart website has to say:

“While having control over your own super can be appealing, it's a lot of work and comes with risk. Only set up your own super fund if you're 100% committed and understand what's involved.”*



what’s the difference between an SMSF and a major fund like HESTA?




You’re the trustee — and personally responsible for all decisions. This includes ensuring your fund complies with the relevant legal obligations and making investment decisions for the fund (directly or through an adviser). We’re the trustee and take care of all legal, administrative and strategic decisions — with help from expert advisers.


SMSFs take time and money to run: In 2020-21, the average operating cost of running an SMSF was $6,427. The median cost was $4,139. (Source: Self-managed super funds: a statistical overview 2020-21, Australian Taxation Office, Table 25: Expenses). 

Running costs are covered by the fees and costs you're charged.

Some of those are based on sharing costs across all members – a key benefit of our scale.



You need strong financial, investment and legal knowledge. If you have to outsource some of that to an adviser, you’ll pay professional service fees. If something goes wrong, you could also lose money through any penalties you have to pay and investment underperformance. We have dedicated teams of fully qualified, experienced professionals across every part of fund management, from investments to law and compliance. Administration fees and costs associated with your HESTA membership cover their costs, and are set out in Fees and costs (pdf)

Peace of mind

If you’re sharing the fund with others, your super could take a hit if there’s a relationship breakdown between members.
Having to roll out a member or unwind the fund altogether is complex and comes at a financial, and sometimes emotional, cost.
As a HESTA member you have your own account which contains your individual super balance, though you do have the flexibility to split super or accept and make spouse contributions. All the admin for those options is managed by us.

Insurance cover

You won’t have insurance through super unless you source, get approved and pay for it. All insurance costs are borne by you and your fellow members alone.

You have access to competitive insurance through a group life policy, without having to be personally underwritten, as soon as you’re eligible.

It’s an easy and economical way to protect yourself and your loved ones. And again, all the insurance ins and outs (of which there are many) are handled by top tier professionals.


And the biggest issue: on average, SMSFs haven't outperformed APRA-regulated funds like HESTA over the longer term.^ SMSF trustees have to create their own strategy and manage it through the inevitable market ups and downs.

Your SMSF investment strategy can be attuned to meet your fund's preferences and specific circumstances such as age, employment status and retirement needs.

However, SMSFs may find it difficult to access large deals and allocations that are sometimes restricted to institutional investors and are subject to investment rules and restrictions.



As a HESTA member you have access to a global, professionally managed portfolio of assets with proven long-term outperformance.

In fact, our investment approach is a winner in every sense, with a slew of awards to prove it. Among them is the Net Benefit award 2022 – recognising the value we deliver to members – from independent ratings agency SuperRatings.#

You have 10 expertly designed investment options to choose from, including our indexed fund. That means you’re a shareholder in some of the world’s most powerful investment opportunities.

You can change your strategy any time, but we strongly recommend that you seek financial advice before you make a change.

And, you have a team of qualified superannuation advisers on hand to provide advice on many aspects of your HESTA super account – all included in your membership, at no extra cost.***


**^ Source: Self-managed super funds: a statistical overview 2020–21, Australian Taxation Office

# Product ratings are only one factor to be considered when making a decision.

***This is known as intrafund advice and is included in the HESTA administration fees and costs.




Not sure what's right for you?

As a valued HESTA member, you're entitled to expert super advice – at no extra cost. Book in for your one-on-one advice appointment now.