major super fund or SMSF?

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

Tell me more


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

Here’s what the Federal Government’s 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.”*



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


You’re the trustee — and personally responsible for all decisions. We’re the trustee and take care of all legal, administrative and strategic decisions — with help from expert advisers.

If anything happens, we handle it.
SMSFs take time and money to run: in 2018, the average operating cost was $6,152 for the year.**  Costs can include the SMSF levy, taxes and fees for financial advisers and auditors. 

Running costs are covered by your membership fees.

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. Your member admin fee ($1.25 per week plus 0.08% of your balance) covers their costs.

For example, a member with a $50,000 balance invested in our Balanced Growth option currently pays $515 for the year (plus fees for any insurance cover they choose to have). Our Fees and costs guide shows you how it works.
You have less protection against fraud or theft than in HESTA. SMSF trustees need to be very confident the people advising them are fully qualified, licensed, experienced and trustworthy. And sadly, SMSF trustees have been prey to fraud in the past, with few avenues to get compensated. The Australian Prudential Regulation Authority (APRA) regulates funds like HESTA. As a fund we’re also super vigilant, protecting members with strong fraud and theft detection and compensation. We use advanced tech systems to zero in on suspicious activity. 
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.
Your super is all your own, 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 automatic, 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.

Average returns for SMSF and APRA-regulated super funds 2013 to 2018

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 Money magazine’s Best Balanced Super Product for 2020 – recognising our long-term, responsible investment approach is good for people, planet and pocket.#

You have 10 expertly designed investment options to choose from, including our low-cost 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.

And, you have a team of qualified advisers on hand to help ensure your investments are finetuned to your unique situation – all included in your membership, at no extra cost.


**^ Source: Self-managed super funds: a statistical overview 2017–18, Australian Taxation Office

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




Check in on your super

It could be your biggest asset one day. Your online account lets you check your super balance, keep your account up to date and much more, 24/7.