Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

Retirement

2020 audits to focus on investment strategy

By Sarah Kendell · January 06 2020
Reading:
egg
egg

Retirement

2020 audits to focus on investment strategy

By Sarah Kendell
January 06 2020
Reading:
egg
egg
2020 audits to focus on investment strategy

2020 audits to focus on investment strategy

author image
By Sarah Kendell · January 06 2020
Reading:
egg
egg
2020 audits to focus on investment strategy

SMSF auditors are expected to focus more clearly on specific details and evidence around a fund’s investment strategy in the coming year as the industry continues to feel the ripple effects from the ATO’s diversification letter campaign of 2019.

Peter Burgess, SuperConcepts’ general manager of technical services and education, told nestegg sister title SMSF Adviser that SMSF trustees could expect a “more conservative approach” from their auditors this year, meaning it was likely that further evidence and documentation could be requested during their fund’s annual audit process.

“Trustees may be asked to provide further evidence of transactions, asset ownership and valuations of assets, particularly whether the fund has unlisted investments,” Mr Burgess said.

“Where the fund has a large exposure to a single asset or asset class, the trustees may be asked to provide further evidence via a trustee minute, addendum or revised investment strategy that they have properly considered the fund’s investment objective, the risks of making the investments, asset diversification and the liquidity and cash flow needs of the fund.”

SMSF auditor and Tactical Super director Deanne Firth said the ATO’s letter campaign to 17,000 trustees last year had shaken many in the industry out of their complacency when it came to constructing a detailed investment strategy.

Advertisement
Advertisement

“For years, trustees have used a set and forget approach to their investment strategies or had the [asset] ranges so broad that they didn’t need to update the strategy,” Ms Firth said.

“In fact, a lot of investment strategies date back to the fund establishment where they signed the strategy that came with the deed. Now the ATO has made it clear to trustees that they want to see evidence of consideration and, especially if the fund isn’t diversified, evidence that they understand the risks of their strategy.”

Ms Firth said she expects 2020 to be “the year of investment strategy updates”, with trustees taking the time to review their strategy and potentially further diversify their portfolio.

2020 audits to focus on investment strategy
2020 audits to focus on investment strategy
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article

Join the nestegg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Nest Egg.

Read more

From the web

Recommended by Spike Native Network

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.