MySuper (default investment option)

MySuper is the default investment option provided by some APRA-regulated super funds where a member does not make an active choice. It is designed to be simple and standardised, typically offering a single diversified or lifecycle investment approach.

Potential benefits and risks

Benefits

APRA‑regulated super funds typically have the following characteristics: 

• Professional oversight and governance: The fund is overseen by a professional trustee who is responsible for operating the fund and meeting legal and regulatory obligations. 
• Funds supervised by APRA: Funds are supervised by APRA, which sets prudential standards relating to governance, risk management and financial soundness.  
• Pooled investment structure: Member contributions are pooled and invested collectively, allowing access to a broad range of assets and investment strategies.  
• Diversified investment options: Funds typically offer a range of pre‑defined investment options that provide exposure across multiple asset classes.  
• Insurance arrangements within the fund: Group insurance (e.g. life or TPD) may be available through the fund structure, subject to eligibility and fund rules

Risks and considerations

• Limited direct control and tailoring over investments: Members generally select from available investment options rather than managing individual assets directly.  
• Fees and costs: Fees (including administration and investment fees) can vary between funds and may impact overall returns over time.  
• Insurance limitation: Insurance cover provided within super may be subject to eligibility criteria, exclusions, and conditions, and may change over time.  

Want to find out more about different types of super funds? Visit the ATO - Choosing a Super Fund guide

Potential benefits and risks

Benefits

This option provides increased investment choice within the constraints of an APRA regulated super fund, allowing members to take a more active role in investment decisions.  Potential benefits can include: 

• Increased choice and flexibility: Members can select specific investments from an approved list rather than relying solely on pre-defined investment options.  
• Investment choices: Access to a range of assets such as, selected ASX shares, ETFS or term deposits, depending on the fund/funds approved list.   
• Retained fund structure: The super fund continues to manage administration and compliance responsibilities  
• Access to online platforms for monitoring and managing investments 

Risks and considerations

• Investment decision responsibility: Members make choices about specific investments (within the option), which means outcomes depend on individual decisions rather than solely on the fund's default strategy. 
• Fees and transaction costs: Additional costs may apply, such as brokerage, platform or administration fees specific to the member‑directed option. 
• Limited investment range: Available investments are typically restricted to a defined menu (e.g. selected shares, ETFs, term deposits), which may not cover all asset classes or strategies.

Potential benefits and risks

Benefits

Some people are drawn to SMSFs because they want to be directly involved in every aspect of managing their retirement savings. This level of involvement can suit certain individuals - but it also comes with significant legal, administrative, and financial responsibilities that should be carefully considered.

• Direct control over investments: Trustees make decisions on how the fund is invested, with access to a wide range of assets, such as shares, ETFs, managed funds, cash, bonds, property, and certain collectables (subject to rules). 
• Tax strategy opportunities: SMSFs can provide opportunities to implement tax-effective investment strategies. However, these strategies depend on individual circumstances and require careful planning with a qualified tax adviser. 
• Pooling resources: Members can combine super balances within one fund, which may increase available capital and support shared investment management. 

Risks and considerations

SMSFs involve greater responsibility and ongoing obligations for trustees.

• Legal responsibility: Trustees are responsible for things like strategic decision-making, administration, and making sure the fund complies with super and tax laws, even when using professional support. For the most up to date responsibilities refer to the ATO website
• Time commitment: Managing an SMSF can require a significant and ongoing time investment, with trustees responsible for overseeing compliance, administration, and strategic decision-making.
• Management costs can add up: SMSFs can be expensive to set up and maintain. Common costs could include accounting, administration, audit, advisory services, and insurance premiums. These costs can add up over time, making it important for trustees to assess whether their fund size justifies these expenses. 
• There is no safety net: Unlike other super funds, SMSFs may not be covered by compensation schemes in cases of fraud or theft. 
• Life events can be complex: Managing deaths, or relationship breakdowns within an SMSF can be complex. Similarly, leaving an SMSF is nowhere near as simple as leaving a public super fund. It's important to know when you need help and to make sure you get it, as well as having an exit strategy and succession in place.  

Find out more about SMSF risks: MoneySmart - Self-Managed Super Fund 

Summary

Each superannuation structure offers a different balance of control, responsibility and involvement. Understanding how these structures work can help you engage more confidently with your superannuation. Because superannuation decisions are complex and have long-term implications for your retirement, consider speaking with a licensed financial adviser before making any changes to your super arrangements. A financial adviser can assess your individual circumstances and help you understand which structure, if any, is right for you.