As we move through 2026, the SMSF sector continues to balance opportunity with increasing regulatory focus. Trustees are navigating a broader range of investment options, weighing the benefits of control and flexibility against rising costs, compliance obligations, and the need for strong diversification.
At the same time, upcoming changes like Payday Super are set to reshape how contributions are managed, placing greater emphasis on timely payments and system readiness.
In this edition, we explore key investment strategies, break down the pros and cons of SMSFs, and highlight what you need to know to stay compliant and prepared for the year ahead.
George Georgiou – Managing Partner #100097434 Rick Welsh – Senior Audit Manager #100304283 Belinda D’Aspromonte – Audit Supervisor #100304550
9 Ways You Can Invest Using SMSF
- Property – invest in residential or commercial property through your SMSF, but you can’t live in or personally use it.
- Invest in international markets – diversify by investing your SMSF money in overseas shares, property, or bonds.
- To hold cash in savings – hold cash in savings accounts to provide stability and liquidity.
- Term deposits – invest in term deposits for low-risk, fixed returns over time.
- Invest in company shares – invest in Australian or international company shares for growth and income.
- Physical commodities – invest in physical assets like gold or silver as a hedge against inflation.
- Personal items – invest in items like art or wine, but you cannot use or enjoy them personally.
- Managed Funds – invest in pooled funds to gain diversification without picking individual assets.
- Cryptocurrency – invest in assets like crypto or other alternatives, but strict compliance rules apply.
Article from SMSF Adviser – smsfadviser.com/9-ways-you-can-invest-using-smsf
Pros & Cons of SMSFs
Pros of SMSFs
1. Full Control
- You decide where and how your super is invested
- Can tailor strategy to your goals (e.g. growth, income, property)
2. Investment Flexibility
- Access to a wider range of assets: direct shares, ETFs, property, term deposits
- More freedom than many retail/industry super funds
3. Potential for Better Returns
- Some SMSFs perform as well as or better than large funds
- Especially if well-managed and diversified
4. Family Control
- Can pool super with a partner/family (up to 6 members)
- Useful for estate planning and wealth transfer
5. Transparency
- You see exactly what you own, the fees you pay, and how investments perform
Cons of SMSFs
1. High Costs (Especially for Small Balances)
- Around $4,000/year in fixed costs
- Very expensive if balance is low ($100k → ~4% fees, too high)
- Becomes efficient only at higher balances
2. Requires Significant Money
- Generally need $200k–$500k+ to be worthwhile
- Many new SMSFs start with too little → poor outcomes
3. Knowledge & Time Required
- You are responsible for investment decisions and compliance/regulations
- Mistakes can be costly
4. Regulatory & Legal Responsibility
- Trustees must follow strict super laws
- Penalties apply for breaches (you’re accountable, not a fund manager)
5. Risk of Poor Diversification
- Common issue: over-investing in property or one asset
- Can increase risk significantly
6. No Safety Net
- No professional fund manager making decisions for you
- No “default” diversified portfolio
Payday Super
In July 2026, we see the introduction of Payday Super. Payday Super basically turns super into a “real-time payment” alongside your wages, instead of something employers deal with every few months. A recent article in SMSF Adviser about “ATO busts Payday Super Myths” covered some key confusions people had with the introduction of Payday Super. Here are our key takeaways from the article.
Myth 1: “Wait until July 1 to start preparing” ❌ Incorrect — businesses should not wait until the start date. ✅ Employers need to:
- Plan cash flow changes
- Check payroll system readiness
- Start transitioning early (especially away from SBSCH)
Myth 2: “You can just change employee pay frequency” ❌ Incorrect — pay frequency is set by employment contracts and awards or enterprise agreements. ✅ Payday Super does not change how often employees are paid — it only changes that super must be paid at the same time as wages.
Myth 3: “You can still use SBSCH after June 30” ❌ Incorrect — the Small Business Superannuation Clearing House (SBSCH) will close from July 1. ✅ Employers must download records before closure and move to alternative payment systems (often within payroll software).
Important rules under Payday Super
- Super must be received by the fund within 7 business days of payday
- Payments only count when received (not sent)
- Funds must allocate or return contributions within 3 business days
Here is the article if you would like to read further: smsfadviser.com/ato-busts-payday-super-myths
A Message from Belinda, Audit Supervisor
From my recent observations, the valuation of unlisted investments continues to be a high-risk area in SMSF audits in 2026. This is largely due to increased ATO scrutiny around compliance with Regulation 8.02B, which requires all fund assets to be reported at market value.
To address this, I recommend that trustees provide objective and supportable evidence to substantiate asset valuations, such as independent appraisals or recent arm’s-length transaction data. Where an asset is maintained at cost or based on a prior valuation, trustees should also offer current supporting evidence justifying that approach.
Providing appropriate documentation demonstrating that valuations are fair and reasonable up front will help minimise audit issues and facilitate a more efficient and timely audit process.
belinda@connectsmsfaudit.com.au
Connect SMSF Audit Pty Ltd is an Authorised Audit Company ABN 78 167 481 834 | PO BOX 267 BRIGHTON VIC 3186