The Most Important Asset Class in an SMSF Isn’t …
By David Saul, CEO, Saul SMSF
As the 2025/26 SMSF audit season draws to a close, I have found myself reflecting on a simple but increasingly important observation.
The greatest risk within many SMSFs today isn’t property.
Not related party loans.
Not cryptocurrency.
It is trustee behaviour.
For years, SMSF professionals have been conditioned to focus on asset classes. We debate the merits of direct property versus listed equities. We scrutinise cryptocurrency. We analyse unlisted investments, private trusts and limited recourse borrowing arrangements.
Yet after auditing billions of dollars in SMSF assets, I am becoming increasingly convinced that the true asset class driving outcomes is something far less visible.
It is the quality of trustee decision-making.
The quality of governance.
The quality of judgement.
And, ultimately, the quality of trustee behaviour.
The reality is that almost every significant compliance issue we encounter can be traced back to human behaviour, rather than the underlying investment itself.
A cryptocurrency holding does not create a compliance breach.
A trustee’s failure to properly document ownership might.
A related-party loan does not automatically create a SIS contravention.
A trustee’s willingness to ignore arm’s-length principles might.
An unlisted investment is not inherently problematic.
A trustee’s refusal to obtain supportable market valuations often is.
The asset is rarely the problem.
The trustee behaviour surrounding the asset is.
This year’s audit season has highlighted another emerging trend.
The increasing sophistication of investments is not always being matched by an equivalent sophistication in governance.
Many trustees are comfortable discussing digital assets, private equity, and complex structures.
Far fewer are comfortable discussing evidence, documentation, valuation methodology, conflicts of interest, liquidity management or succession planning.
The result is that some SMSFs are becoming operationally complex while remaining governance-light.
That should concern all of us.
As auditors, we are increasingly finding ourselves assessing not only the assets held by a fund but the behaviours that sit behind them.
Does each trustee genuinely understand the transactions they have entered into?
Are decisions being documented?
Are valuations objective and supportable?
Are conflicts being identified and managed?
Are trustees acting in the best interests of all members?
These questions tell us far more about the health of a fund than a balance sheet ever will.
The acceleration of technology has only amplified this challenge.
It has never been easier for AI generate an investment strategy, a trustee minute, a loan agreement or a supporting narrative.
But no technology can manufacture genuine governance.
No AI tool can create evidence that never existed.
No technology can replace professional scepticism.
No algorithm can substitute real trustee integrity.
As an industry, we should be careful not to confuse better-looking documentation with better governance.
They are not the same thing.
The SMSF sector remains one of Australia’s great financial success stories. I have been fortunate enough to watching this uniquely Australian success story grow from a niche sector into a trillion-dollar force within our financial system.
It has empowered individuals to take control of their retirement savings and build substantial wealth through informed decision-making.
But with that freedom comes responsibility.
The trustees who will thrive over the next decade will not necessarily be those who identify the next investment opportunity.
They will be those who embrace strong governance, transparency, documentation and accountability.
Because in many SMSFs today, the most important asset class is not property, shares or cryptocurrency.
It is trustee behaviour.
And increasingly, that is where the greatest compliance risk lies.
