What is an investment strategy and why is every Superannuation Fund obligated to have one?
An Investment Strategy is a documented plan for making, holding and realising a Superannuation Fund's assets or investments. This document is to outline what investments and particular investment ranges are to be invested in. This can be broken down into several categories such as International Listed Shares, Australian Shares etc. Trustee's of a SMSF are obligated to keep the Investment Strategy up to date so that the investments made do not breach the investment strategy, which could make the Superannuation Fund non-complying.
Legislation has determined that Superannuation Funds require an investment strategy to achieve and maintain the sole purpose of a Superannuation Fund, to provide benefits to members for retirement. Other underlying purposes of an Investment Strategy encompass protecting members' retirement benefits and minimising irresponsible investments.
Investments made according to an investment strategy ensure's Trustee's from disputable action against them by members in relation to their retirement benefits. If your investments are not in line with your Investment Strategy the ATO may issue your Superannuation Fund as non-complying and consequences/penalties may apply.
For further information on Investment Strategies please contact your financial advisor. If you currently do not have a financial advisor, call 5413 9300 to make an appointment to see PJT's preferred financial advisor Mark Cann. Mark Cann is an authorised representative of PIS.