Investment Strategy Diversification

Trustees may receive a letter from the ATO concerning their Fund’s diversification requirements. As Trustees of a Fund, it is your duty to ensure that the investment strategy complies with diversification requirements. It is good practice to note under the Fund’s minutes that the investment strategy is up-to-date and appropriate. The Trustees can edit the SMSF’s investment strategy to suit the Fund’s needs.

If Trustees receive a letter referred to above, they may need to consider the following points to illustrate adherence to the diversification requirements:

☑ Confirm that the investments made meet the Fund’s investment objectives

☑ Confirm that you have considered diversification of your Fund’s investments

☑ Confirm that you have considered the risks associated with an inadequate diversification within the context of your SMSF’s investment portfolio

☑ Confirm that the making, holding and realising and the likely return from your investments have regard to your retirement objectives and expected cash flow requirements

☑ Confirm the liquidity of your investment, meaning the Fund is able to pay benefits as Members retire and pay other costs incurred

☑ Consider whether to hold insurance cover for one or more Members of your SMSF

If you receive a letter referred to above, please make sure to document your adherence to the points noted above and provide a written evidence to the auditor to confirm adherence to the diversification requirements set by the ATO. If you are one of our clients, you can download a compliance form in either Excel or Pdf format below and send us the signed copy of the document.

For more information in regards to investment strategy you can read our page with detailed explanation here.

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We are Melbourne based with clients throughout Australia. Our SMSF administration service is mostly paperless. This enable us to charge a fair fee, resulting in a good value-proposition for you.

No Advice

Superannuation Warehouse is an accounting firm and do not provide financial advice. All information provided has been prepared without taking into account any of the Trustees’ objectives, financial situation or needs. Because of that, Trustees are advised to consider their own circumstances before engaging our services.