Warning – undiversified SMSFs with one asset could face being sued by beneficiaries

Asset for SMSFs undiversified SMSFs with one asset could face being sued by beneficiaries

Assets in SMSFs undiversified SMSFs with one asset could face being sued by beneficiaries

Self-managed superannuation fund (SMSF) trustees run the risk of being sued when undiversified SMSFs have one asset. If a fund is invested in only one asset or class of assets, beneficiaries can claim it prevented a higher return.

“Though trustees did not properly diversify the SMSF but still made money, beneficiaries are popping up years down the track and claiming that had the trustee invested in an index fund or [used] modern portfolio theory, they would’ve had more money,” DBA Lawyers senior associate Bryce Figot told InvestorDaily. “Therefore, they are suing for the difference. It doesn’t really get much airplay so a lot of trustees don’t know that there is essentially a duty to diversify, unless your trust deed says you don’t have to diversify.” Krystine Lumanta, Investor Daily


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