When “Set and Forget” Fails: Why SMSFs Offer Greater Security and Control Than Retail Super Funds

In a move that shocked over one million Australians, HESTA – one of the country’s largest industry superannuation funds – has paused all withdrawals, contributions, insurance claims, and investment switches until at least June 2025. This sweeping freeze, stemming from a major platform migration, has left many members effectively locked out of managing or accessing their retirement savings for over six weeks.

While HESTA insists the temporary suspension is necessary to modernise systems, the episode raises a critical question: how much control do Australians really have over their retirement when their super is held in a retail or industry fund?

The HESTA Freeze: A Case Study in Centralised Risk

According to ABC News, HESTA’s system overhaul began in mid-April and will continue to impact over 1 million members through to the end of the financial year. This includes more than 200,000 retirees who may be relying on scheduled pension payments that are now delayed, creating not just financial inconvenience, but real-life hardship for some.

This incident underscores a fundamental risk of traditional superannuation: centralised decision-making and systemic bottlenecks. When your super is held by a large institutional fund, you are subject to their timelines, technology systems, and decisions—often without much recourse or real-time control.

“Members are essentially passengers in a vehicle they don’t control...when issues occur at the fund level, individual savers bear the brunt.” - Independent superannuation analyst Michelle Levy

SMSFs: A Pathway to Control and Customisation

A Self-Managed Super Fund (SMSF) offers Australians an alternative: a structure where you are in the driver's seat. While SMSFs come with responsibilities, they also provide something institutional funds can’t: transparency, control, and customisation.

Key Advantages of SMSFs over Retail and Industry Super Funds:

• Complete Access and Timing Control

  • With an SMSF, you decide when to buy or sell assets, when to draw down income, and how quickly to respond to market shifts or personal needs—something not possible when locked into a platform-wide “freeze”.

• Customised Investment Strategies

  • Trustees can pursue a tailored investment approach, including residential and commercial property, managed funds, direct shares, and term deposits—all aligned to your goals and risk tolerance.

• Transparent Cost Structure

  • Retail funds typically bundle fees, making true costs opaque. SMSFs, while requiring diligence, allow members to see and control every dollar spent—on accounting, auditing, or asset management.

• Avoiding Platform-Driven Disruptions

  • Events like HESTA’s freeze demonstrate how system-wide changes can disrupt member access. SMSFs, with their decentralised nature, aren’t subject to the same mass outages or administrative delays.

    
    

Not Just for the Wealthy: SMSFs Are Becoming More Accessible

There’s a lingering myth that SMSFs are only for the ultra-wealthy. However, as the ATO's most recent statistics show, the average SMSF balance sits at around $1.4 million, but entry is viable at much lower levels—particularly for couples pooling super balances or using borrowing structures to invest in property.

“With the right guidance, an SMSF can be a cost-effective and powerful way to take charge of your retirement—even for balances starting around $200,000.” David Koch (financial commentator)

Why Control Matters More Than Ever

With over $3.5 trillion in Australia’s super system and persistent volatility in global markets, more Australians are questioning whether “set and forget” is still fit for purpose. The HESTA freeze illustrates that even the largest, most trusted funds are not immune to disruption—and when problems arise, members often have limited visibility and zero say.

In contrast, SMSFs empower Australians to:

• Select asset classes based on conviction, not fund-wide mandates.

• Ensure retirement strategies are aligned with personal goals, not generic models.

• Avoid platform-level delays or fund-wide suspensions.

  
  

Final Word: Ask Yourself Who's Really in Control

If you’re relying on a retail or industry super fund to secure your retirement, recent events should prompt a critical review of your strategy. A Self-Managed Super Fund is not for everyone, but for those who value autonomy, customisation, and the ability to act quickly in uncertain times, it’s an increasingly attractive option.

Want to explore whether an SMSF is right for you? WT Capital specialises in helping Australians navigate the transition from retail funds to self-managed structures—particularly those looking to invest in property through their super. Contact us to find out more.

Disclaimer: This article is general in nature and does not constitute personal financial advice. Please consult a licensed financial adviser or SMSF specialist to discuss your specific circumstances.