In terms of the number of shareholdings, Charlie Munger (Warren Buffet's long term partner) says that three investments is more than enough diversification and Buffet defines diversification as deworsification. They both subscribe to the view of having few investments but knowing an awful lot about them.
A low fee balanced fund will not give you a much better return than buying the index and possibly worse. Buffet's will provides: "Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund." The numbers support Buffet. According to Morningstar, the Vanguard 500 Index has beaten 70% of the funds that buy shares in large U.S. companies.
My question is: What are your SMSF fees? Surely, only accounting/audit fees as with two investments you couldn't/shouldn't be paying for management or investment advice.
This is not a criticism of Paul's advice, just an alternative view.

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It seems like a very high price to pay for managing something basic.

Since Buffett was mentioned, he did prove that a low-cost managed fund which merely tracks the top companies is likely to do better than a more "hands-on" and more expensive service. And you get to diversify across all sectors - not just banking - which means you're not putting all your eggs into the one basket.

Paul and Warren both come across as giving simple, down-to-earth, common-sense advice. And that usually wins out in the long run.

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