Interest in self-managed super funds (SMSFs) has skyrocketed among Australians in recent years. The Australian Taxation Office reports that as of June 30, 2014, nearly 1 million people were members of SMSFs, compared to 758,652 in June 2009, an increase of more than 200,000 in merely four years. In fact, over just the past 12 months, the number of funds and their combined worth have increased 6 percent.

There is a variety of reasons behind this rise in popularity. First, SMSFs give fund holders the opportunity to pay lower fees when compared to traditional superannuation funds. The low maintenance cost and the flat fee structure appeals to many investors, particularly those who have assets valued at $200,000 or more. SMSFs also allow small business owners to purchase commercial property from which the businesses can operate.

However, Brice Doherty, the head of UBS Asset Management Australia, notes that most people opt for SMSF over other superannuation funds because they allow greater control and choice over how the super is invested.

Indeed, many Australians have lost confidence in publicly available super funds and SMSFs allow a greater deal of flexibility when it comes to investment options. One of the most popular investment choices is direct property. In fact, many younger borrowers use their SMSFs as leverage to purchase commercial or residential property as part of their investment strategy. As many as 38 percent of borrowers ages 18 to 44 invest in property, according to a recent Financial Services (FSC) and UBS report. Additionally, SMSF holders can use their fund balance to complete renovations on any property owned by the fund, allowing them to save money on commercial rent.

This finding has led to concerns about whether or not SMSF borrowing is a threat to Australia’s financial system. Critics like Financial System Inquiry chairman David Murry have suggested all-out bans on limited borrowing recourses, to ensure that fund holders use SMSFs for their intended purpose: saving for retirement.