SMSF investment strategy software has significantly improved in recent years and can offer a very good practice tool for accountants if they are not entirely satisfied with the current templates in use, a specialist auditor has noted.
“We’re seeing really great software now come out in this space of investment strategies. One [application] in particular I’ve seen [being used by] a couple of accountants and advisers allows you to [use] drop-down [menus] and select what asset class has a high concentration or lacks diversification,” Elite Super managing director Katrina Fletcher told delegates at the Institute of Public Accountants 2021 National Congress held recently on the Gold Coast.
“It puts an investment strategy together really well so if you’re not happy with the template that you have, in terms of the new ATO requirements, I would suggest that you [examine] some of these software options.
“The software I think makes it easier to get [the investment strategy] right every year.”
Fletcher also took the opportunity to clarify that while this critical component of the SMSF ideally should be reviewed every year, it did not have to be a burdensome process for practitioners.
“The yearly revision of [the investment strategy] is another sticking point we have with our accountants, [but] it doesn’t necessarily need [to result in] an annual new strategy,” she said.
According to Fletcher, practitioners can streamline the process by focusing on some specific factors.
“Consider any significant changes to the fund’s actual investments that the trustees have made. [For example], there may have been a large cashing out from property to cash and then back into shares,” she advised.
“At that time, obviously, the investment strategy needs changing. There could be members coming and going and at that time [trustees will] also need to update the investment strategy.”
However, if there are no significant changes to the fund in a given year, a review minute recording the fact the trustees have considered the existing strategy, looked at the actual investments and decided no amendments are needed will be sufficient, she acknowledged.