Investment strategy

The rules around SMSF trustees conducting a review of their fund's investment strategy have been tightened. The review is designed to ensure that the investment strategy continues to reflect the purpose and circumstances of your fund and its members. The trustees are required to regularly review their fund's investment strategy. There is no prescribed format for the investment strategy, but it must reflect the purpose and circumstances of the fund and its members. When preparing your investment strategy, you need to consider the following:
  • Diversification (investing in a range and class of assets)
  • The risk and likely return from investments
  • The liquidity of fund's assets (how easily they can be converted to cash to meet fund expenses)
  • The fund's ability to pay benefits when members retire and the ability to pay other costs the fund incurs
  • The members’ needs and circumstances (for example, their age and retirement needs)
  • Whether the fund should hold insurance cover for one or more members of the fund.
Best practice should be for minutes of meetings to provide evidence of the outcomes of the review each year.

About the author

Naz Randeria is the Founder and Managing Director of Reliance Auditing Services. With more than 25 years’ experience in audit and accounting, Naz is an ASIC registered SMSF Auditor, SMSF Specialist Auditor, Registered Company Auditor, and Chartered Accountant.

She is actively involved in the SMSF audit sector and is passionate about sharing audit, compliance and SMSF knowledge with clients, professional colleagues and the wider public.

View Naz Randeria’s full profile

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DISCLAIMER: This information is an interpretation of rules, regulations and standards. It should not be considered as general or specific advice and neither purports, nor is intended to be advice on any particular matter. No responsibility can be accepted for those who act on the contents of this publication without first obtaining specific advice. Liability limited by a scheme approved under Professional Standards Legislation.