SMSFA reinforces need for advice amid turbulence

“The advice and reassurance that these advisers can offer can prove crucial to trustees when it is so easy to be panicked into making the wrong decisions when markets are falling sharply,” Mr Maroney said.

“This can be particularly so for trustees who are nearing retirement and are having to watch their superannuation nest eggs, which represent years of hard work and savings, suddenly diminish in value.

“In this environment, having a specialist adviser to offer wise counsel on the best course of action can be invaluable.”

Mr Maroney said he is heartened by the that fact the vast majority of SMSFs survived the global financial crisis (GFC), and that many of them did so because of the sound advice they received post-2008.

“The reality is investment markets do fluctuate wildly, especially when a global phenomenon such as the COVID-19 coronavirus hits, so having access to trusted advice is a prudent course of action for most trustees,” he said.

Mr Maroney added that advisers also have a valuable role to play in ensuring that SMSFs’ portfolios are adequately diversified.

He pointed out that with the Australian Taxation Office (ATO) guidance released recently, it reminded trustees that an SMSF’s investment strategy should be “your plan for making, holding and realising assets consistent with your investment objectives and retirement goals”.

“It should set out why and how you’ve chosen to invest your retirement benefits in order to meet these goals. It is not a valid approach to merely specify investment ranges of zero to 100 per cent for each class of investment,” Mr Maroney said.

“It’s an assessment the association broadly concurs with; specialist advisers can help trustees review their investment strategy and achieve a more balanced portfolio where this is needed.”