Video transcript – Investment strategy

A self-managed super fund investment strategy is essential.

An investment strategy that you regularly review is not just a requirement under super laws, it will help you grow your retirement savings.

It’s important to consider the age, employment and retirement needs of your SMSF members.

What level of risk is in your investments, and is this appropriate for the members at this stage of their lives?

Having a variety of investments helps to spread investment risk; it helps to not have all your eggs in one basket.

Your fund needs ready access to cash so it can pay administrative expenses, income tax and minimum income stream payments when they are due. So, it’s probably best not to have all of your fund investments in fixed assets, such as property.

Consider the insurance needs of all members. You also need to consider who will be the beneficiary of the insurance.

Keep in mind the investment strategy is not something you just set and forget – it needs to be regularly reviewed to ensure it continues to meet the current and future needs of members.

There are events during the life of your SMSF that should prompt you to review the investment strategy, including when a new member joins or a member leaves the fund, or the fund starts paying an income stream to a member.

This may also be a good time to think about whether an SMSF is still right for you.

You don’t need to make changes every time you review your investment strategy, but you should document the review and any decisions made so your SMSF auditor can see you’ve met your obligations.

There are penalties for failing to keep records, which trustees have to pay out of their own pocket.

You can seek professional advice to help with your investment strategy, but remember: as trustee, you are still ultimately responsible for your fund’s investment decisions.

    Last modified: 12 Nov 2015QC 39855