Self-managed superannuation fund (SMSF) advisers need to ensure their SMSF investment strategy to clients is not interpreted as an advice document, according to Skeggs Goldstien.
The firm’s director and SMSF specialist adviser, Adam Goldstien, spoke at the SMSF Association National Conference and said the investment strategy document needed to be “trustee driven” and the adviser needed to ensure trustees complied with the rules by “guiding, directing, and leading them”.
“Investment strategies are not a plan; they’re a strategy. The document should be no more than four to five pages and ideally include an introduction that explains the purpose of the document, a section on the fund’s profile (which helps to link the strategy back to the fund’s unique circumstance), and sections on the investment objectives and investment strategy,” he said.
“It should incorporate the trustee’s best answers, using their words, to questions about risk, diversification, liquidity, liabilities and insurance. There should also be a section that explains when the strategy should be reviewed.”
Goldstien said advisers could ask trustees “what if” questions to help assist liquidity, diversification, and risk.
“The adviser also has an important role to play in educating trustees on how to properly formulate and implement an investment strategy. Trustees should be encouraged to reference sections of their trust deed in their investment strategy to demonstrate they’ve considered the circumstances of the fund,” he said.