Liberty's chief distribution officer discusses the changing face of SMSF lending, and why the non-bank lender is digging in, not shying away
As Australia's residential SMSF lending market shuts its doors to new borrowers, Liberty is betting that the brokers who stay closest to it now will be the ones best placed when the market reopens on different terms.
New rules ending most residential lending through self-managed superannuation funds (SMSFs) took effect on 10 August, following the passage of the Treasury Laws Amendment (Tax Reform No. 1) Act 2026.
The change faced a broking industry backlash when the ban was first announced, and set off a 45-day scramble among clients racing to beat the deadline.
Under the reform, SMSFs generally can no longer enter new limited recourse borrowing arrangements (LRBAs) to acquire residential property, though existing residential SMSF loans are grandfathered and refinancing of those loans remains available.
For David Smith (pictured), chief distribution officer at Liberty, the change landed with little warning – and for a product tied directly to clients' superannuation, that mattered. "This is superannuation we're talking about," Smith recently told MPA TV. "This is a serious asset for the future of the client in question."
But rather than pull back, Liberty chose to lean in. "We haven't pulled back from any aspect of our SMSF lending, and we've experienced significant volumes as a result," Smith said.
The lender has added staff across both its broker-facing and assessment teams to manage a rush of applications tied to contracts dated before the deadline, while quietly repositioning what its SMSF business actually does day to day.
"The emphasis has shifted though from rather than the administrative or transactional to the supportive and the explanatory," Smith said. "We've really played that role of sort of helping hand to take both brokers and their clients through the journey."
Commercial SMSF: open for business
With new residential SMSF loans off the table, Smith is steering brokers toward what comes next rather than dwelling on what's ending. Commercial SMSF lending – untouched by the ban – presents a viable alternative pathway.
"Residential SMSF lending is closing, but other forms of lending, commercial lending within SMSF continues of course into the future," Smith said, adding that many brokers haven't historically considered it a first option for clients.
Liberty is also positioning itself for a second wave of activity once the dust settles: refinancing the residential SMSF loans that already exist. "We're working now as fast as we can to streamline our processes and our approach to being able to serve those refinances down the track.”
Looking past the numbers
The SMSF shake-up is only part of what Smith sees changing. He argues every deal reaching a broker's desk – SMSF or otherwise – is growing harder to read at face value, and that treating it as a spreadsheet exercise is a mistake.
"Look beyond the obvious," Smith said. "As a good broker would know, looking for the context and the full story behind the scenario is often much more important than the simple facts and figures up front."
That's also his pitch for why brokers should widen their lender panel beyond the majors. Non-bank lenders, he argues, often carry more flexibility on policy and appetite – but that flexibility only pays off if brokers know where to look for it, and know it well before the deal lands.
"It's good to be well-versed in those policies, those niches, and those alternative ways of looking at your scenario. We'd like very much to get involved early to engage at a BDM, a scenarios team, or even a credit assessor level early on."
For Smith, that early engagement is what actually separates a lender that processes an application from one that can find a way to approve it. "The trick of using alternative lenders and non-bank lenders is to get the depth of their experience and expertise in those different styles of assessment and lending, so that you can uncover the benefits and policies that exist there, even if you don't use them all the time."
An open invitation
Smith highlighted one glaring disadvantage of non-bank lenders: unlike the majors, they're not front of mind for brokers every day, simply because a Liberty-shaped deal doesn't land on every desk every week. His answer is to ask brokers to show up anyway.
"Engage with us… when you don't have a deal that looks like Liberty coming across your desk, so that we can remind you, refresh your understanding and your knowledge so that come the time you will recognise something that would benefit from, say, a 1% buffer or a 40-year loan term.
"We love to get involved early. We love to understand the story and the context behind the scenario. That's how we find our ability to drive a path to yes more often when we understand more."
