Diversification in Self Managed Super Funds is so important to protect retirees and pre-retirees from major losses.
As a Self Managed Super Fund trustee, you need to be careful about where you invested the Self Managed Super Funds’ money. No Self Managed Super Fund should be so exposed to any one investment or asset manager that a collapse or complete lack of performance in the Self Managed Super Funds’ assets would cause major financial problems for the trustees such as the loss of the major part of the Self Managed Super Funds’ savings.
As experience shows, for example the Trio Capital collapse, there can sometimes be very little anyone can do to prevent a major collapse of a total asset class. Therefore a Self Managed Super Fund trustee, or investor, should never have hugely significant amounts invested with one fund manager or with any one investment.
If a Self Managed Super Fund trustee is recommended to invest more than 10 per cent of their total capital with any one asset manager or managed fund, then as the trustee, you should get a second opinion.
A Self Managed Super Fund can have a large amount invested in a particular asset class, such as equities, but it should not be all in one fund or in one stock.
Diversification in Self Managed Super Funds is the best protection against major losses of retirement savings.
Contact our Self Managed Super Funds Perth specialists today or call Paul Baggetta on 9317 7300.
February 2, 2017
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