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Investments, Superannuation

Where to now for SMSFs?

With the coming and going of the 2019 federal election, many SMSF trustees will have breathed a huge sigh of relief several Labor Party proposals that may have negatively affected their SMSF are – for now – off the political agenda.

The proposal to ban refunds of excess franking credits that would have impacted on many SMSF members and self-funded retirees in retirement phase being rejected by the electorate delivers increased certainty for those potentially affected. Also, Labor’s plans to tighten post-tax contribution limits as well as the rules for concessional contributions and ban limited recourse borrowing arrangements will ensure many positive SMSF strategies are still available.

Hopefully a period of stable superannuation policy lies ahead for SMSF trustees. So where to now for SMSFs?

With a less than rosy domestic and global economic outlook, SMSFs need to monitor and continuously evaluate their investment strategies, whether they are in retirement or still building funds during their accumulation phase.

The recent twin news of an interest rate cut by the Reserve Bank of Australia and sluggish gross domestic product growth of 0.4 per cent from the March 2019 quarter will have many investors concerned.

Lower interest rates will have retirees, who are dependent on fixed interest investments and holding cash as an important liquidity and risk buffer, questioning their strategies as returns on these asset classes continue to stagnate or decrease.

A slowing domestic economy, as well as continuing global headwinds, will have investors looking for growth concerned. The prevailing economic outlook is enough to worry any seasoned investor and SMSF trustees will need to maintain a cautious watch on their investment strategy while remembering that superannuation is a long-term investment.

On the other side of the net return equation, SMSFs should keep an eye on the costs their funds incur. New and increasingly efficient investment and administration platforms make reducing costs for SMSFs easier than ever.

So, the answer of where to next for SMSFs is for trustees to focus on these key investment and fund management issues.

Luckily for SMSF trustees and investors, these issues will be thoroughly explored at the SMSF Association’s upcoming SMSF + Investor Expo from 21-22 June at the Melbourne Convention & Exhibition Centre. The Expo will offer attendees the opportunity to hear from industry and investment experts and a chance to explore a wide variety of SMSF, investment and lifestyle information all in one location.

If you are managing your own super, thinking of doing so or are simply a self-directed investor there is still time to register for the SMSF + Investor Expo, a must not miss SMSF and investment event.

As a special offer for smstrusteenews readers, you are able to redeem a FREE ticket to this event. Click here to redeem your ticket.

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selfmanagedsuper is the definitive publication covering Australia’s SMSF sector. It uniquely offers both online and print publications tailored separately for SMSF professionals and individual trustees participating in the fastest growing and largest sector of the superannuation industry. As such, it is a must read for those wanting to stay informed about the latest news, regulatory developments, technical strategies, investments, compliance, legal and administration issues concerning SMSFs.

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