Investments, Strategy

Template strategies must be flexible

investment strategy template SMSF

Using template investment strategies to meet the ATO’s requirements may not be viable if they cannot be tailored to specific circumstances.

SMSF advisers and accountants should still be wary about relying on template investment strategies, even if produced by software tools, as these are unlikely to show the strategy is sufficiently tailored to a fund’s needs, according to an SMSF accountant and adviser.

Susan O’Connor Accounting principal Susan O’Connor said the ATO has warned SMSF trustees to take care when using investment strategy templates as they may be too generic and the lack of specificity may be an issue for fund trustees and those providing them with advice.

“If you are an auditor of an SMSF adviser or accountant who is using templates, highlight there is a risk that if the ATO reviews all of those funds and every single one of their clients is using the same template that show their clients, as in the trustees, are not giving consideration to the investment strategy,” O’Connor said during a recent presentation held by The Auditors Institute.

“If the trustees are using a template, it needs to be one where they can modify things that impact the investment strategy, such as the objectives of the investment strategy, the individual members in the fund and their specific details.”

She noted a number of software and administration providers offered investment strategy templates and SMSF practitioners should examine the ability to which they can make specific changes to meet the particular needs of their clients.

“Am I happy with these tools? The question should be: are you happy with them? Do they tick all the boxes required by the ATO in regards to what is required in an investment strategy?

“Are you able to go in and enter information about the fund’s objective, the details for each member and their objectives? It should be interactive, so can it satisfy the things the ATO talks about and then it would meet the criteria.”

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