“To be honest decent advisers are already doing something like this. Whenever a good adviser recommends a course of action, they also highlight reasonable alternatives if there are any and flag the relevant positives, negatives and implications of both,” said Ms Heffron.

The role of an adviser, she said, is to equip the client to make a sensible decision that leans on all the expertise and experience of the adviser.

“So, I wonder why SMSFs need to be singled out here? Should there also be a requirement, for example, to highlight the red flags that come with choosing a public offer fund?” she said.

“Perhaps advisers should be required to quote the average time taken to pay death benefits for the fund they recommend, or the number of times the fund has made unit pricing errors?”

She explained that ASIC could create a red flag document that talks about the lack of control a member will have in a large fund, the fact that product design changes to adopt new strategies are often slow and frequently only happen after the SMSFs have led the way, and the extra fees they need to charge to build or maintain their operational risk reserves.

“Finally, perhaps advisers should be required to specifically quantify the fees relative to an SMSF and show that having a large balance in a fund that charges most of its fees on a percentage of assets basis can be terrifyingly expensive,” she said.

“That would help the member make an informed choice about whether they want to manage their own super via an SMSF or pay a large fund to do it for them.”

Ms Heffron acknowledged that SMSFs are not for everyone, just like an investment property or running a small business.

“[However], SMSFs are the perfect answer for a great many people. I hope to see the day when we stop treating these people like they have been hoodwinked into something slightly stupid rather than making informed and carefully considered decisions about how they take personal responsibility for their retirement,” said Ms Heffron.

“Instead, let’s congratulate them for that and help them make the best possible fist of doing it.”