Powered by MOMENTUM MEDIA
subscribe to our newsletter
Diversification in fresh focus following ASIC report

Diversification in fresh focus following ASIC report

Diversification, ASIC, piggy banks
Miranda Brownlee
12 July 2018 — 1 minute read

Findings released by ASIC last month indicating a lack of diversification in some SMSF portfolios, has seen an increased focus on  international equities, according to an online broker platform.

Last month, ASIC released two reports following a major review it conducted into SMSF advice.

One of the reports indicated that in 19 per cent of cases, clients were at an increased risk of financial detriment due to a lack of diversification.

 

It also flagged concerns about people being encouraged to set up an SMSF to invest in property and the growing use of property one-stop-shops.

Monex Securities Australia managing director Alex Douglas said if it "becomes harder for SMSF trustees to invest in property, then we expect to see more SMSF managers seeking opportunities for investment in international share markets".

Speaking to SMSF Adviser, Mr Douglas said both the reports pointed to  lack of awareness about the whole concept of diversification.

"The report uncovered that SMSFs have a generally poor understanding of the need for diversification and even what diversification is," he said.

However, the increased scrutiny from ASIC, he said, has seen SMSF professionals and trustees shift their focus on international equities and other asset classes outside of Australian equities and property. 

"People providing advice to SMSF trustees are expecting to see more scrutiny from ASIC, and know they're expected to give more balanced advice and to point out the risks of putting all of your assets into one asset class," he said.

"So I think we'll see them increasingly advising trustees of the other opportunities that exist out there." 

.

Diversification in fresh focus following ASIC report
smsfadviser logo
join the discussion

Do you think the government should reinstate the accountants’ exemption for SMSF advice?

SUBSCRIBE TO THE
SMSF ADVISER BULLETIN

Get the latest news and opinions delivered to your inbox each morning

In this month's issue:

  • Time wrap
  • The tech bull run
  • From hobby to passion
  • Golden Years
  • An untimely reminder
  • Why change is so difficult
  • Key Strategies for equalising super