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Phuong Hoang Thi Ngo

Aug 17, 2022

Investment Strategy & SOA

in SMSF Technical Forum

Dear Sir/Madam,

I have asked the annual review fund investment strategy for audit a SMSF

but client provided the Statement of Advice that included information for both their personal and SMSF that the Financial Adviser made in that FY . This SOA also included sections such as Risk Profile, Strategy recommendations, Investment portfolio recommendations etc

I wondering that whether the auditor still need the trustees provide a signed review fund Investment Strategy as normal?

Many thanks

2 answers0 replies

Comments (2)

Phuong Hoang Thi Ngo

Aug 18, 2022

Thanks you

THE AUDITORS INSTITUTE

Aug 17, 2022

Hi Phuong

Yes you need an investment strategy signed by the trustees.

The SOA has not been prepared by an adviser and not by the trustees. My view is that the trustees could refer to the SOA as part of their investment strategy that they "formulate".

As per the ATO on their website re investment strategies:

"The super laws require that you as trustee must formulate and regularly review your fund’s investment strategy."

Regulation 4.09 of SIS Regulations states:

"The trustee of the entity must formulate, review regularly and give effect to an investment strategy that has regard to the whole of the circumstances of the entity including, but not limited to, the following:

(a) the risk involved in making, holding and realising, and the likely return from, the entity's investments, having regard to its objectives and expected cash flow requirements;

(b) the composition of the entity's investments as a whole, including the extent to which they are diverse or involve exposure of the entity to risks from inadequate diversification;

(c) the liquidity of the entity's investments, having regard to its expected cash flow requirements;

(d) the ability of the entity to discharge its existing and prospective liabilities;

(e) whether the trustees of the fund should hold a contract of insurance that provides insurance cover for one or more members of the fund."

If other members have a view please let the forum know.

Thanks

SMSF AAA