One of the first decisions when setting up an SMSF is how the fund will be governed: through individual trustees or a corporate trustee. It sounds like a minor administrative choice buried in the setup paperwork. In practice, it affects everything from asset protection to how easily your fund can adapt as your life, your business, and your family circumstances change over time.

The trend across the sector has moved decisively toward corporate trustees over the past decade. According to the most recent ATO statistics as at 30 June 2025, approximately 72 per cent of all SMSFs now have a corporate trustee, up from around 58.6 per cent in 2017, and more than 80 per cent of newly established funds now choose a corporate trustee structure from the outset.

Individual Trustees

With this structure, each member of the fund is also a trustee, and fund assets are held in the names of all trustees jointly, on behalf of the fund. It is generally cheaper to set up, since there is no company to register or maintain, which is why it remains a reasonable choice for some smaller or very simple funds.

Corporate Trustee

Here, a company acts as trustee, with each member typically a director of that company. Fund assets are held in the name of the corporate trustee rather than in the names of individual members, which changes how the fund interacts with membership changes, liability, and, in many cases, borrowing.

1. Continuity when membership changes

If a member joins, leaves, dies, or loses capacity, an individual trustee structure requires the fund’s assets to be retitled into the names of the remaining or new trustees, which means updating title on every single asset the fund holds. With a corporate trustee, only the company’s directors change, and asset ownership does not need to be altered at all.

2. Clearer separation of assets

A corporate trustee holds fund assets separately, in the company’s name, from any personal assets a member might hold in their own name. This can materially simplify record keeping and reduce the risk of assets being mixed up, which is itself one of the more commonly reported SMSF contravention types.

3. Single-member funds

A corporate trustee structure is generally required, or at least strongly preferable, where a fund has only one member, since individual trustee rules require two trustees even for a single-member fund. A corporate trustee allows that member to be the sole director of the company instead.

4. Limited liability and a lower penalty exposure

A corporate trustee generally limits a trustee’s personal liability to the assets of the company, rather than exposing personal assets in the same way an individual trustee structure can. Penalties for certain contraventions can reach $19,800 per person. For a four-member fund with individual trustees, that could mean each of the four trustees is fined $19,800 individually, a combined exposure of $79,200. Where the same fund has a corporate trustee, the directors are collectively liable for a single $19,800 penalty rather than four separate ones.

5. Lender preference for borrowing

Banks and lenders generally prefer, and in many cases require, a corporate trustee structure where an SMSF is using a Limited Recourse Borrowing Arrangement to acquire an asset such as commercial property. If borrowing is part of your fund’s strategy now or in the future, this alone often settles the decision in favour of a corporate trustee.

A Worked Comparison

Consider a four-member family SMSF, perhaps two parents and two adult children, that holds a mix of listed shares and a commercial property leased to the family business. Under an individual trustee structure, if one of the adult children later moves overseas and needs to be replaced as a trustee, every single asset the fund holds needs to be formally retitled to reflect the new trustee group, a process that takes time and incurs its own legal and administrative costs. Under a corporate trustee structure, the same event only requires updating the company’s directors with ASIC. Multiply this scenario across a fund’s typical lifespan, which can span decades and multiple membership changes, and the cumulative cost and administrative burden of an individual trustee structure becomes considerably more significant than the upfront setup saving might suggest.

The Trade-Off

A corporate trustee comes with additional setup and ongoing costs, including company registration with ASIC and an annual ASIC review fee for the trustee company. For some smaller or genuinely simple funds with no plans to borrow, add members, or hold complex assets, individual trustees remain a reasonable and lower-cost choice. The right answer depends on the number of members, the likelihood of membership changes, whether borrowing is likely, and how the fund’s assets are structured.

Changing Structures Later

It is possible to move from individual trustees to a corporate trustee after a fund is established, but it involves retitling every fund asset into the new trustee’s name and updating the trust deed accordingly, which takes time and incurs cost. It is generally more efficient to get the structure right from the outset than to change it later once the fund holds several assets.

How New Wave SMSF Helps

This is a decision our legal and accounting teams work through with you together, because the right trustee structure depends on both your legal circumstances and your fund’s practical administration, including any future plans around property or borrowing. We do not treat this as a tick-box question at setup. We review it as your fund, your family, and your business circumstances evolve.

Frequently Asked Questions

Is a corporate trustee always better than individual trustees?

Not always, but it is the more common choice, particularly for funds with more than one member, any plan to borrow, or a desire for cleaner asset separation and lower personal liability exposure.

How much does it cost to set up a corporate trustee?

Costs include ASIC company registration and an ongoing annual ASIC review fee for the trustee company, in addition to the standard costs of establishing the SMSF itself.

Can I change from individual trustees to a corporate trustee later?

Yes, but it requires updating the trust deed and retitling every asset into the new corporate trustee’s name, which takes both time and cost.

Do I need a corporate trustee for a single-member SMSF?

It is not always a strict legal requirement, but it is generally the more practical option, since individual trustee rules require two trustees for a fund, even where there is only one member.

Does a corporate trustee protect my personal assets?

It generally limits a trustee’s liability to the assets held by the company acting as trustee, rather than exposing a trustee’s personal assets outside the fund in the same way an individual trustee structure can.

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This article is general information only and does not take into account your personal objectives, financial situation, or needs. It does not constitute financial, tax, or legal advice. Figures referenced are drawn from published ATO statistics and are current as at the date of publication. New Wave Financial Planning Pty Ltd is an Authorised Representative of NWG Financial Services Pty Ltd, AFS Licence No. 538619. Please speak with your New Wave SMSF adviser before acting on any information in this article.