"We are always looking at our portfolio in the context of market trends, customer needs and our approach to risk," an AMP spokeswoman said.

"We only ever withdraw solutions for customers after careful consideration and in this case we believe it is prudent to stop selling our SuperEdge property loans to SMSFs for the foreseeable future," she said.

CBA will stop making loans to SMSF owners in mid-October. AMP's deadline is October 20.

The exits come amid rising scrutiny on the surge in self-managed super funds borrowing large sums to sink into investment properties, as falling house prices and stalling rents reduce earnings.

Self-managed super funds make up almost 30 per cent of the $2.7 trillion super sector. More than 1.1 million Australians now have a self-managed super fund.

Regulators are concerned about SMSF investors using their super to invest in single residential and commercial properties because of a lack of diversification and the increasing threat of capital and income loss in a falling property market where it is difficult to find tenants.

There have also been worries about property spruikers encouraging investors to roll their super into a property through a fund.

The royal commission was told a former celebrity financial adviser Sam Henderson advised Fair Work Commissioner Donna McKenna to roll her existing superannuation into an SMSF and borrow through it to invest in property, which would have immediately resulted in her losing $500,000 as a penalty for early redemption from her fund.


The most recent figures from the Australian Taxation Office reveal the number of DIY super funds that have borrowed from banks to invest in property has doubled over the past five years to more than 50,000 accounts. Total borrowing by SMSFs has grown by more than 860 per cent since 2012.

Almost one in 10 SMSF owners has accessed limited recourse borrowing arrangements, which are mostly used to fund property investments. SMSF borrowing for property has ballooned from $2.5 billion in 2012 to more than $25 billion last year.

Although the total rate of borrowing does not have analysts worried yet, the high gearing of individual funds that have bought investment property leaves thousands of SMSFs vulnerable to a housing downturn.

The Productivity Commission's latest report on the superannuation sector said the rise in borrowing through super funds to invest in property was not a systemic concern to the system. But it urged further monitoring.

Systemic risk is low because the loans are non-recourse, which means they are secured by property.

The Tax Office and Australian Securities and Investments Commission recently discovered that nine out of 10 fund trustees failed to comply with "best interest" tests and other legal requirements.

AMP said SuperEdge Loans lodged before October 20 would be "assessed and reviewed under current policies".

After November 10 existing SuperEdge Loans will not be allowed to switch to interest-only repayments, internally refinance and extend their loan term.

But they will be allowed to switch to principal and interest ahead of their scheduled switch date, switch to a fixed rate and reduce their loan balance.

There will also be no changes to AMP Bank's SuperEdge deposit products.

The company will retain its SMSF administration and software business, SuperConcepts, that has about 11 per cent of the market.