Difference between APRA and SMSF

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Do you want a stable income stream even after retirement?

In this case, establishing a superannuation fund is the best idea. But what do you prefer, a self-managed super fund or an APRA-regulated fund?

Yes! A self-managed super fund is getting popular. Many Australians find it a reliable source to invest their savings.

Typically, it is a private-based super fund where you have the ultimate control over investment.

The Australian Taxation Office (ATO) is the regulator of it. The unique feature of an SMSF fund is all members are trusses.

Self-managed super offers a boarder range of investments. You can invest in Australian and overseas shares, residential and commercial properties, and different private areas.

But you have to go through with some regulation, and breaching it can lead to severe penalties.

On the other hand, a conventional type of super fund is the Australian Prudential Regulation Authority regulated fund, also known as ARPA.

It is a larger fund with thousands of members.

This fund includes the industry fund, corporate super, and company super. Maximum taxpayers of Australia invest their superannuation in this fund.

Usually, it has the following categories:

  • Approved deposit fund
  • Eligible rollover fund
  • Small APRA Fund

These two superannuation systems have several benefits in different aspects, also have some limitations. Therefore, first of all, you have to decide which superannuation process is suitable for you.

Bellow, we share a distinctive discussion to illustrate the dissimilarities between APRA and SMSF. It will help you make the right decision:

Two significant differences between APRA and SMSF:

Regulatory difference

Australian prudential regulator runs the APRA-based funds. On the other hand, the Australian Taxation Office (ATO) is the regulator of SMSF.

These regulatory differences make a significant impact on various sets of rules.

Most SMSF rules are strict, and getting ATO approval is more challenging. But ATO provides its best support and information to its trustees to run an SMSF.

On the other hand, an APRA fund member has almost no control over investment. But they get the maximum support from the authority in case of any fraud investment or theft.

Trustee responsibility:

The unique feature of an SMSF is all the members of SMSF are also trustees. They run their fund and are responsible for the tax and super laws.

But in all types of APRA funds, a professional trustee undertakes all responsibilities like risk management, investment strategy, administrative task, etc.

Usually, a professional trustee gets a license and approval from APRA.

Apart from these two issues, SMSF and APRA also have several dissimilarities in the following terms:

Investment strategy:

In a self-managed fund, members can develop an investment strategy. They have control to make the decision.

But in an APRA, a member cannot select any specific asset for investment.


In SMSF, the Insurance premium is higher than APRA or any super.


ATO never assists SMSF trustees to resolve disputes like fraud invent or any disagreements. Even SMSF members do not get any compensation scheme from the government.

But they can resolve any complaints from the court (AT their expense).

APRA members can file a complaint to the Australian Financial Complaints Authority (AFCA) in case of any disagreements.

Two benefits that SMSF offers and APRA do not:

Control and flexibility:

For better control and flexibility, SMSF is the most dependable option. Here you can make investment decisions. You can invest your assets in broader areas.

(SMSF is quite flexible to invest in residential and commercial properties)

Market agility:

SMSF can quickly respond to market change and move faster than APRA or any superannuation fund.

But establishing an SMSF is a bit expensive and a time-consuming process. Moreover, statistic shows that the performance of APRA funds is 10 to 30 % better than SMSF.

KEY Takeaways:

Why should you still choose an SMSF instead of APRA?

The success rate of an APRA fund is one step ahead of SMSF. Furthermore, SMSF is not recommendable if you do not have a sufficient level of balance.

On the other hand, SMSF offers more control and flexibility. Therefore, SMSF is not a bad option for everyone’s circumstances.

If you prefer a good return and can bear the relevant expense, establishing a self-managed super fund will be right for you.

But knock us to get detailed guidelines for a successful set-up.

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