Compliance, Documentation, SMSF

Advice doesn’t negate strategy obligations

SIS Act SMSF Self-managed superannuation Investment strategy Mailene Wheeler Vincents

SMSF trustees receiving professional advice should be reminded action does not remove their obligation to create and execute an investment strategy for their fund.

SMSF trustees should be reminded their engagement with an adviser or accountant does not negate their responsibility to have an investment strategy for their fund and sign off on it each year, a specialist adviser has noted.

Vincents superannuation advisory director Mailene Wheeler said while there are differences in the services offered by advice providers, the obligation to develop and implement an investment strategy rested with SMSF trustees under section 52 of the Superannuation Industry (Supervision) Act.

“You do still need an investment strategy if a financial adviser is used and what we often see is they will prepare the investment strategy based on the reviews they are having with the client, but the client will sign off on that,” Wheeler said during a recent webinar hosted by The Auditors Institute.

“When it comes to diversification, this is based on what we expect a financial adviser to do when formulating an investment strategy for a client and acting in their best interest.

“When you use a financial adviser, it doesn’t matter who you’re using, but there needs to be an investment strategy and you need to document it.”

She said it was also possible for accountants to help prepare an investment strategy, particularly where they had the trustees provide the required information through a questionnaire.

“We actually do that at our firm in that we have a template and a checklist and sections that the client can fill with a tick,” she said.

“They need to identify what type of returns they want and can write in a percentage they are trying to achieve each year, and there is a range of different choices they can make. We have other sections about insurance and have they considered it, can they can tick yes or no and provide more details.

“We then send it back to them to review or edit, but they agree we are purely documenting their investment strategy and not providing them with any advice, we are only helping them document it to comply with the regulations and requirements.

“In giving that guidance in some cases I may instead direct them to buy an investment strategy template from somewhere or seek some further advice because as an accountant, I don’t want to be helping them formulate it, but I’m happy to help them document it.”

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital