Most people who ask how to start an SMSF are really asking a different question: should I? Once the fund exists, you and the other trustees carry legal responsibility for every investment, record and lodgment.
This guide is the decision check before setup. It covers the costs you will carry, the six-member limit, trustee duties, the protections you give up and the warning signs of a bad pitch. Every rule was checked against ATO SMSF guidance and ASIC’s MoneySmart for the 2025-26 and 2026-27 years.
It is for people still deciding. If you have already decided, our step-by-step SMSF setup guide covers the trust deed, registration and rollover in order.
Key takeaways
- An SMSF can have up to 6 members, and generally each must be a trustee or a director of the corporate trustee.
- Every year the fund needs an independent audit and pays the ATO supervisory levy ($259 for a continuing fund).
- There is no government financial assistance for SMSFs hit by fraud or theft.
- SMSF members cannot use AFCA for complaints against their own fund.
- MoneySmart reports trustees spend on average more than 8 hours a month running an SMSF.
- You stay legally responsible even if you pay professionals to help.
SMSF decision check at a glance
| Question | What the regulators say |
|---|---|
| Members | Up to 6, all trustees or directors of the trustee company |
| Time | More than 8 hours a month on average (MoneySmart) |
| Yearly costs | Audit and supervisory levy every year, plus possible accounting, valuations, actuarial, legal, insurance and advice costs |
| Fraud or theft | No government financial assistance for SMSFs |
| Complaints | No AFCA for disputes with your own fund |
| Who is responsible | You and the other trustees, even with professional help |
Source: ATO, About SMSFs, ATO, Compare SMSFs with other super funds, MoneySmart, Self-managed super fund, ATO, Lodge SMSF annual returns, checked 9 October 2026.
What does an SMSF cost to run?
No regulator publishes a standard price, and quotes vary with the fund’s assets and how much you do yourself. What the ATO does list is the type of cost. Two are compulsory every year: an independent audit by an approved SMSF auditor and the supervisory levy, which the ATO lodgment page sets at $259 for a continuing fund and $518 for a newly registered fund, covering two years.
Other costs can include a tax agent, asset valuations, actuarial certificates, legal fees, an administrator, insurance and financial advice. A corporate trustee adds ASIC fees, which the ATO notes are lower when the company acts only as an SMSF trustee.
MoneySmart’s point is simple: the lower the starting balance, the more those fixed costs eat into returns.
How does an SMSF compare with a large super fund?
| Issue | SMSF | Industry or retail fund |
|---|---|---|
| Investment choice | Trustees choose the actual assets | Usually a choice of risk option, not specific assets |
| Responsibility | Members, as trustees | Professional licensed trustee |
| Regulator | ATO | APRA |
| Fraud or theft | No government financial assistance | May be eligible for assistance |
| Complaints | Court or dispute resolution at own cost | AFCA, possible statutory compensation |
| Insurance | Premiums may be higher | Group cover often cheaper |
Source: ATO comparison page. For the wider picture of fund sizes, see APRA’s superannuation statistics.
What duties do SMSF trustees take on?
The ATO trustee obligations page lists duties under the Superannuation Industry (Supervision) Act 1993 and your trust deed. The main ones:
- Sole purpose: the fund exists to provide retirement benefits, or death benefits if a member dies before retirement. Nobody can get a present-day benefit from its assets.
- Best financial interests: act honestly and in the best financial interests of all members.
- Investment restrictions: generally no lending to members or relatives, no buying assets from related parties and no borrowing, apart from limited exceptions.
- Investment strategy: prepare one in writing and review it regularly.
- Annual cycle: value assets at market value, prepare accounts, arrange an audit, lodge the annual return and pay the levy.
- Notify changes: tell the ATO about certain changes within 28 days.
Our SMSF compliance notes explain how these duties play out each year.
Who should and should not start an SMSF?
MoneySmart suggests an SMSF may suit you if you have the time and ability to be actively involved, accept the trustee duties, want more control over investments, have looked at the alternatives and the costs make sense for your balance. If any of those is a no, a large fund may serve you better.
Warning signs in an SMSF pitch
In June 2026 the ATO warned about people being pushed into an SMSF to buy one investment, such as a property or crypto, with offers described as exclusive, urgent or high-return. Its checklist is to ask why you are being encouraged, check the person is registered to give advice and speak to someone independent. If property is the goal, first read how bare trusts and SMSF property work.
Who can help you decide?
The ATO’s advice page splits the roles. A licensed financial adviser can tell you whether an SMSF suits you and help with the investment strategy. A tax agent can lodge returns and deal with the ATO. An accountant can set up the fund’s accounts. A lawyer can prepare the trust deed. Check that a tax agent appears on the Tax Practitioners Board register.
New to Australia? You will need your own TFN first, and our guides on TFN registration and ABN registration for new arrivals explain those steps.
Worked example: testing cost against balance
Meera has $150,000 in super and her partner has $250,000. She collects written quotes for accounting, audit and administration. Purely to show the sums, assume they total $2,741 a year (a made-up number, not a market price).
Add the $259 supervisory levy: $2,741 + $259 = $3,000 a year.
If Meera goes alone: $3,000 / $150,000 = 2.0% of her balance each year.
If both join: $3,000 / ($150,000 + $250,000) = $3,000 / $400,000 = 0.75%.
She then compares each percentage with the fees on her current fund statements, and adds the value of any insurance she would lose by leaving.
Rule of thumb: turn every quote into a percentage of the balance you will actually roll in, then compare it line by line with your current fund’s annual statement before you sign anything.
Common mistakes when deciding to start an SMSF
- Starting for one investment: the ATO says an SMSF should support retirement goals, not a single property or crypto deal.
- Assuming a professional carries the risk: the trustees stay responsible.
- Rolling out before arranging insurance: existing cover can end when the old account closes.
- Ignoring the exit: illness, relationship breakdown, death or moving overseas can force a wind-up.
- Trusting a cold call: early release of super schemes are illegal, and the ATO says significant penalties apply.
FAQ about starting an SMSF
Is there a minimum balance to start an SMSF?
No law sets a minimum balance. The practical question is cost. MoneySmart points out that the lower the starting balance, the bigger the impact of fixed costs on your returns. Get written quotes for accounting, audit and administration, add the ATO supervisory levy, and compare the total as a percentage of your balance with what your current fund charges.
How many people can be in an SMSF?
An SMSF can have up to six members. Generally every member must be a trustee, or a director of the corporate trustee, so everyone shares legal responsibility for every decision. Families often find that more members means more decisions to agree on, so think about how disagreements and future changes would be handled.
Can my accountant run the SMSF for me?
An accountant or administrator can keep the books, prepare the accounts and lodge the annual return, and a tax agent can deal with the ATO for you. The ATO is clear that you and the other trustees remain responsible for the fund even if you use a professional. Investment advice should come from a licensed financial adviser.
Do I lose my insurance if I move to an SMSF?
You might. MoneySmart warns that rolling all your super out of another fund can end the insurance cover you had there. The ATO also notes SMSF premiums may be higher than in large funds, which can get discounted rates. Arrange any new cover before you close the old account.
What protection do SMSF members have if something goes wrong?
Less than in a large fund. The ATO says no government financial assistance is available to SMSFs for fraud or theft, and the ATO does not resolve disputes between members. SMSF members cannot complain to AFCA about the fund itself, although they may complain about a third-party firm they dealt with.
Talk to specialist before it costs you
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Nanak Accountants can prepare cost comparisons, set up the fund with you, and handle bookkeeping, accounts and the annual return. See our SMSF services, visit Nanak Accountants, call 1300 626 258 or contact us. The ATO SMSF hub and our guide to the benefits and drawbacks of SMSFs are good next reads.
This article is general information only and is not personal tax or legal advice. Figures and rules were checked against the ATO before-you-start SMSF pages, the ATO annual return page and ASIC MoneySmart on 9 October 2026. Rates and thresholds change, so confirm the current position before acting.
