The economic and market fallout from coronavirus, the Reserve Bank of Australia (RBA) rate cut and recent Australian Tax Office (ATO) investment strategy guidance sends a ‘stark’ message to self-managed superannuation funds (SMSF) about their need for specialist advice.
John Maroney, SMSF Association chief executive, said trustees who had a strong relationship with their specialist SMSF adviser were positioned to make the correct decisions about their portfolios when markets were turbulent.
“The advice and reassurance that these advisers can offer can prove crucial to trustees when it is so easy to be panicked into making the wrong decisions when markets are falling sharply,” Maroney said.
“This can be particularly so for trustees who are nearing retirement and are having to watch their superannuation nest eggs, which represent years of hard work and savings, suddenly diminish in value.”
There was a lesson to be learned from the global financial crisis (GFC), as Maroney said the SMSFs that navigated it successfully did so because of the advice they had received post-2008.
“In this environment having a specialist adviser to offer wise counsel on the best course of action can be invaluable,” Maroney said.
The recently-released ATO guidance reminded trustees an SMSF’s investment strategy should be “your plan for making holding and realising assets consistent with your investment objectives and retirement goals”.
“It should set out why and how you’ve chosen to invest your retirement benefits in order to meet these goals. It is not a valid approach to merely specify investment ranges of zero to 100 per cent for each class of investment,” Maroney said.
“It’s an assessment the [SMSF] Association broadly concurs with; specialist advisers can help trustees review their investment strategy and achieve a more balanced portfolio where this is needed.”
Comments
Dont worry, the Accountants, Real Estate Agents and property spruikers who set up these SMSF's under their limited licencing carve out are investment specalists and obviously work in the best interests of their clients. "Recommending" a client start a SMSF with a balance of below $200k to invest in property shcemes which give that accountant/property spruiker a $20k + commission and charging the same client $8k pa accounting fees is a good result for clients who have put their trust in that accountant/property spruiker. Im sure the accounant spoke about diversifying the protfolio and explained that having a property on its own is not a satasfactory investment strategy. Im sure the client was made aware of the kick backs the accounant gets were fully disclosed to the SMSF holder at point of sale. Im sure all this advice has been documented is a statament of advice which outlines why this is the most apporpriate strategy. Im sure that ASIC will take some action if this process wasnt well documented and doesnt comply with the Best Interests Duty.
Actually, as Financial Advisers are so untrustworthy, why dont we also offer cheap limited licences to used car sales people so they can promote SMSF's under limited licensing too, they would have as much (if not more ) investment experience than accountants and are really good sales people.
Mick Gatto and the Carlton mafia would do a better job at cleaning up this industry (due to all the carve outs) than ASIC who dont actually care about anything other than where their caree is going and how many boards they can become members of to collect fees for blaming everything on self licensed advisers whilst letting EVERY OTHER PARTY involved in financial services get away with everything.
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