This video titled from the ATO provides an in-depth look at how trustees of Self-Managed Super Funds (SMSFs) can develop effective investment strategies to meet their retirement goals.
Source: the ATO Youtube Channel
Key Topics Covered:
- Understanding SMSF Investment Strategies: The video begins by defining what an investment strategy is within the context of an SMSF and why it’s crucial for trustees to have a well-documented plan.
- Legal Requirements: It outlines the legal obligations for SMSF trustees to formulate, review, and give effect to an investment strategy that has regard to the whole circumstances of the fund.
- Factors to Consider:
- Risk and Return: Assessing the risk profile of investments in relation to the fund’s objectives and the members’ retirement needs.
- Diversification: The importance of spreading investments across different asset classes to minimize risk.
- Liquidity: Ensuring the fund has sufficient liquid assets to meet its liabilities as they fall due.
- Insurance: Considering whether the fund should hold insurance cover for its members.
- Developing the Strategy: Guidance on how to create a tailored investment strategy, including setting clear objectives, selecting appropriate asset allocations, and establishing benchmarks for performance.
- Monitoring and Reviewing: Emphasis on the need for regular reviews of the investment strategy to ensure it remains aligned with the members’ goals and any changes in circumstances or legislation.
- Case Studies: The video presents practical examples of different investment strategies employed by SMSFs, illustrating how various approaches can be applied based on specific member situations and objectives.
By following the guidance provided, SMSF trustees can develop a robust investment strategy that aligns with their retirement objectives and complies with regulatory requirements.