SMSF Strategies

When considering SMSF strategies, you need to consider what your goals are and establish an appropriate level of risk. Generally speaking, a SMSF needs to have a conservative investment strategy, as the sole purpose test  requires SMSF trustees to invest solely to provide retirement benefits to its members. High risk strategies for short term gains would be a contravention of this fundamental principal.

A self managed super fund will usually adopt smsf strategies that spread the investment risk by diversification of assets and maximize gains by acquiring sound investments with long term growth potential. At the more conservative end, SMSF strategies would consist of a mix of cash products such as term deposits and treasury bills. At the riskier end of the spectrum would be complex financial instruments such as contracts for difference or simple share options. Somewhere in the middle might be real property investment. All smsf strategies need to consider liquidity as well as well as risk.

Under the SIS Act, a trustee is permitted to appoint a financial adviser to help create an SMSF strategy that is balanced and suited to the needs and requirements of the fund’s members.  Although the financial adviser will have obligations to provide appropriate advice to achieve the desired investment outcomes, the trustee will ultimately be responsible for the SMSF strategies that a fund adopts.

Pin It on Pinterest

Share This