SMSF — Investment Strategy
SMSF Investment Strategy Review
Every SMSF must have a documented investment strategy that is reviewed regularly under SIS Regulation 4.09. We help trustees document and review that strategy as a compliance requirement — covering risk, return, diversification, liquidity, the ability to discharge liabilities and member insurance. We document your decisions; the investment choices remain yours.
- SIS Reg 4.09
- Annual review
- Diversification
- Liquidity
- Member insurance
Self Managed Super Funds are not for everyone. SMSF rules are complex and trustees are personally responsible for compliance with superannuation, tax and investment laws. Establishing and running an SMSF involves trustee duties, ongoing administration, audit and reporting costs. Information on this page is general only — seek personal advice based on your circumstances before establishing or changing an SMSF strategy.
The compliance requirement
What a Regulation 4.09 strategy must address.
The regulation sets out the factors trustees must have regard to. The strategy document we help prepare deals with each one explicitly — and ties the reasoning back to the fund’s actual investments.
Risk & return
Documented risk appetite and expected return
A clear statement of the risk the trustees are willing to accept and the likely return they expect from the fund’s investments, expressed against the members’ time horizon to retirement. The reasoning is recorded so the strategy reflects deliberate trustee decisions, not a generic template.
Diversification
Spread of assets — or documented concentration
The strategy addresses how the fund is diversified across and within asset classes. Where the fund is concentrated in a single asset, such as a property, the higher risk is acknowledged and the trustees’ reasoning for accepting it is set out in writing.
Liquidity
Cash flow to meet expenses and pensions
An assessment of whether the fund holds enough liquid assets to meet expenses, contributions tax, audit and accounting fees, and any pension payments as they fall due. Funds heavy in illiquid assets need a documented plan for meeting these outflows.
Ability to discharge liabilities
Existing and prospective obligations
The strategy considers the fund’s capacity to discharge its existing and prospective liabilities — minimum pension payments, tax, levies and ongoing costs — having regard to member ages and whether the fund is in accumulation or pension phase.
Member insurance
Insurance considered — decision recorded
Since 2012 trustees must consider whether to hold insurance cover for one or more members. The fund is not required to hold cover, but the consideration must be recorded. The strategy states that insurance was considered and documents the trustees’ decision either way.
Reflects actual investments
Strategy matched to the real portfolio
A strategy that does not match what the fund actually holds is a common audit finding. We reconcile the documented strategy against the fund’s real holdings each year so the two are consistent — and flag any drift for the trustees to address.
Review triggers
When the strategy needs a fresh look
The strategy must be reviewed regularly — at least annually — and also whenever the fund’s circumstances change materially. The points below are general compliance prompts, not financial product advice on what the trustees should then decide.
A member event
A new member joining, a member leaving, a death or a marriage breakdown changes the membership and the fund objectives. Each is a trigger to revisit the strategy and record a fresh trustee decision.
Starting a pension
Commencing an account-based pension shifts the fund toward needing liquidity for minimum pension payments. The strategy should be reviewed so the liquidity and liability factors reflect the new pension phase.
A major asset transaction
Buying or selling a significant asset — particularly property — changes the diversification and liquidity profile. The trustees should document why the resulting position remains consistent with the members retirement objectives.
Heavy concentration in one asset
A fund that has become dominated by a single asset class needs the concentration acknowledged in writing, with the trustees reasoning for accepting the higher risk and a plan for meeting the fund liabilities.
Process
How we document and review the strategy — each year.
A repeatable annual cycle that produces auditor-ready evidence: a current strategy, a dated review minute, and reasoning that matches the fund actual holdings.
Gather fund position
We pull the fund current holdings, member balances, phase (accumulation or pension), cash position and any events during the year — the inputs the Regulation 4.09 factors are tested against.
Test the existing strategy
We check the strategy on file against the real portfolio: does it still reflect what the fund holds, does it address each 4.09 factor, and has anything changed that the document has not caught up with.
Identify gaps and triggers
We flag any gaps — missing insurance statement, unaddressed concentration, stale return assumptions — and any review triggers that occurred during the year, for the trustees to consider and decide on.
Trustees decide
The trustees make the decisions. Where they want personal advice on asset allocation or specific investments, we refer to a licensed financial adviser. We document the decisions; we do not make the investment choices.
Update and minute
We update the strategy document to reflect the trustees decisions and prepare a dated review minute recording that the review took place and what was resolved — the evidence the auditor looks for.
File for audit
The current strategy and review minute are filed with the fund records and provided to the independent SMSF auditor as part of the annual return and audit cycle, closing the loop on Regulation 4.09.
Frequently asked questions
Investment strategy — common questions.
Regulation 4.09 of the Superannuation Industry (Supervision) Regulations requires the trustees of every SMSF to formulate, regularly review and give effect to an investment strategy. The strategy must have regard to the whole circumstances of the fund, including the risk and likely return of the investments, the diversification of the fund, the liquidity of the assets, the fund ability to discharge its existing and prospective liabilities (such as paying pensions and expenses), and whether the trustees should hold insurance for one or more members. It is not a one-off document; it is a live record of the trustees decisions that must reflect what the fund is actually doing.
Related
Where this fits in the bigger picture
The investment strategy review is one piece of the annual SMSF compliance cycle. It sits alongside fund setup, the broader compliance program and the SMSF annual return and audit.
- SMSF
SMSF services overview
The full SMSF services scope — annual return, audit coordination, compliance and investment strategy review.
- SMSF
SMSF setup
Establishing the fund correctly — trustee structure, deed, registration and the first investment strategy document.
- SMSF
SMSF compliance
The ongoing compliance program — sole-purpose test, in-house assets, related-party rules and trustee obligations.
- SMSF
SMSF annual return
The yearly financials, audit coordination and SMSF annual return lodgement that the strategy review feeds into.
- Guide
How One Roof works
SMSF compliance scoped alongside accounting, tax and (where relevant) lending. Read how the engagement runs.
- Local
Get in touch
Book a call to review your fund investment strategy ahead of the annual return and audit.