SMSF in Focus: Is Your Investment Strategy Still Doing Its Job?

Every SMSF must maintain a documented investment strategy. This is a core compliance requirement, not a formality.

The ATO has consistently reinforced that an investment strategy must be prepared and reviewed regularly, genuinely considered by trustees, and actually reflected in how the fund is managed.

The start of a new financial year is the right time to carry out that review.

What the ATO is looking at in FY27

The ATO has increased scrutiny on SMSF investment strategies that appear generic, outdated, or disconnected from the fund’s actual composition.

Common issues flagged include:

• Strategies drafted at establishment and not updated since
• Asset allocation ranges so broad they provide no real governance
• Funds where the actual investment mix does not match the documented strategy
• Strategies that do not account for the insurance needs of fund members

None of these issues will necessarily result in compliance action on their own. But they represent the kind of gaps that become visible under audit.

What a meaningful investment strategy covers

ATO guidance describes a compliant strategy as one that considers:

• The risks of the investment strategy as a whole
• The likely return against the fund’s objectives
• The fund’s liquidity needs, including the ability to pay benefits as members approach retirement
• The fund’s ability to meet its tax, admin, and member benefit obligations
• The insurance needs of members

It should also reflect the fund’s current asset allocation, with realistic ranges for each asset class, not a blanket statement that all assets are permitted.

A practical checklist for trustees

1. Retrieve your current investment strategy document
2. Compare it against the fund’s current asset allocation
3. Check that member circumstances (age, retirement timeline, risk appetite) are still accurately reflected
4. Confirm insurance requirements have been considered and documented
5. Update the strategy document and have it signed by the trustee/s
6. Keep a record of when it was reviewed

Why doing this now matters

An investment strategy review is not time-consuming if the fund is in good shape. A couple of hours with your SMSF accountant or adviser will usually be sufficient.

The alternative, finding out at audit that documentation does not meet requirements, carries a much higher cost in time, money, and stress.

We work with SMSF trustees regularly on compliance and strategic reviews. If you have questions about what your fund’s investment strategy should cover, we are happy to talk through the general requirements. Call 1300 866 113 or book a time via our website.

This article contains general information only and does not constitute financial or investment advice. Please seek professional advice for your specific situation, including from a licensed financial adviser.

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