The architect of Australia's superannuation system says people who use self-managed super funds should not be allowed to enjoy the benefits of a statutory safety net.
Instead, investors ought to learn to be responsible for their own savings, including when their entire savings are lost.
Jeremy Cooper, the author of the Cooper review of superannuation, said the self-managed super fund (SMSF) sector was designed for people who wanted to manage their own money. Therefore, it was a "fundamental philosophical point" that the public was not asked to cover losses in the sector.
"You can theoretically lose your entire investment savings," Mr Cooper said. "This is where the 'self' in 'self-managed' really comes to the fore - you can't have your cake and eat it too."
There was no special statutory safety net for self-managed funds in the event of a fraud, but you could pursue people for breaches of various duties, he said.
"The fact is you get certain privileges by being in the SMSF sector, but the trade-off is you take responsibility," he said. "You win your own wins, and you own your own losses."
There is more than $1.3 trillion of superannuation savings in Australia, about 30 per cent of which is held in SMSF, according to Australian Prudential Regulation Authority figures. But the funds are not regulated by APRA.
Several high-profile company collapses in recent years have wiped out hundreds of millions of dollars in super savings, including those from the SMSF sector.
Trio Capital, described as the largest superannuation fraud in Australian history, was wound up in late 2009 with $176 million in savings lost or missing.
Nearly 300 people who had invested in Trio via its self-managed funds were not entitled to any compensation, but those who had invested in Trio via APRA-regulated superannuation funds were.
Mr Cooper, speaking at the Australian Securities Investments Commission's annual forum in Sydney, said people needed to accept the SMSF sector had its risks.
"The main thing is to make this as clear as we can for those who elect to come into this sector [so] there are no disappointments later on," he said.