SMSF Association challenges proposed investment strategy reforms

The SMSF Association has expressed concerns regarding a government proposal that would require self-managed superannuation fund (SMSF) trustees to provide a written investment strategy to the Australian Taxation Office (ATO) at the time of fund establishment.

SMSF Association CEO Peter Burgess argued that the ATO is not a prudential supervisor and therefore lacks the regulatory mandate to control investment decisions or diversification. He noted that an initial assessment of a fund's diversification might not reflect a trustee's total wealth or their long-term plans to use future contributions to diversify assets.

Under current requirements, an SMSF investment strategy must be a written plan addressing risk and return, diversification, liquidity, liabilities, and insurance needs to ensure the fund can meet members' retirement objectives.