Understanding Your SMSF Investment Strategy: What It Should (and Shouldn’t) Include
If you manage your own SMSF, you’re legally required to have an investment strategy, and it needs to do more than just tick boxes.
A well-structured strategy doesn’t just keep the ATO happy; it helps guide your decisions and ensures your investments reflect your retirement goals.
What the ATO Expects
Your investment strategy must be documented and tailored to your fund. The ATO expects it to show:
- The level of risk you’re willing to accept and the expected returns
- How your investments are diversified
- Whether the fund can pay member benefits and expenses when due
- How the fund will meet members’ retirement needs
- Whether insurance should be considered for any members
The strategy must be reviewed regularly and updated when needed. If it’s not up to date or doesn’t match how the fund is actually being managed, it could cause issues during an audit.
What a Good Strategy Includes
A solid investment strategy is specific to your fund, not a one-size-fits-all template. It should reflect:
- The age, goals, and risk appetite of each member
- The current mix of investments and why those decisions were made, including percentage range allocations per investment choice
- Any high-risk or concentrated investments (like property or crypto), with a clear explanation
- Enough flexibility to adjust, while staying aligned with your long-term objectives
If your strategy is vague, out of date, or full of generic wording, it may not hold up if reviewed by your auditor or the ATO.
When You Should Update It
Your SMSF investment strategy should be reviewed at least once a year. But you may also need to update it when:
- A member joins or leaves the fund
- A pension starts or stops
- You buy or sell a major asset
- The market shifts significantly
- Your goals or circumstances change
The strategy must reflect how the fund is currently being run, not how it looked three years ago. It should be reviewed at least annually and adjusted in line with any of the above changes.
Keeping Your Strategy Relevant
Each year, we’ll check whether your strategy still makes sense for where you’re at. If anything’s changed, a new property, a shift in your retirement plans, or a change in member circumstances, we’ll help you document the update and make sure everything lines up.
A sound investment strategy isn’t just about compliance; it’s about clarity. If it’s been a while since yours was reviewed, now’s the time.
Not sure if your investment strategy still stacks up? We’ll help you review it properly with no guesswork and no jargon.
