Investment Strategy Information Sheet

The obligation of a self managed superannuation fund to have an investment strategy is both a statutory covenant and a prescribed standard. The investment strategy obligation imposed upon the trustee is to formulate and give effect to an appropriate investment strategy for the fund.

Section 52B(2)(f) of the Superannuation Industry (Supervision) Act 1993 imposes the investment strategy obligation as a statutory covenant (so far as the obligation applies to SMSFs). This section expressly imposes on trustees of SMSFs the obligation to regularly review the investment strategy. Previously, the obligation to regularly review the investment strategy was implied from other sections of the SIS Act.

Reg 4.09 of the SIS Regulations provides that the investment strategy obligation is a prescribed operating standard.

As a prescribed standard an intentional or reckless breach of the investment strategy standard is an offence. 1.4 Reg 4.09 requires trustees of self managed superannuation funds to consider, as part of the investment strategy of the fund, whether insurance cover should be held by the trustees in respect of one or more of the members of the fund. 

Consequently, Reg 4.09 requires trustees of self managed superannuation funds to have an appropriate investment strategy for the fund and additionally imposes an obligation upon the trustees to regularly review the investment strategy.

This must read information sheet from SUPERCentral provides  important information on policy justification, regulatory consequences, objectives and strategies amongst others.