Masterclass SMSF – Risk Profile – Importance and tools to assist but cautions to consider

Masterclass SMSF – Risk Profile – Importance and tools to assist but cautions to consider

SMSF – Risk Profile – Importance and tools to assist but cautions to consider

Part of compliance for SMSF trustees is the Investment Strategy, which considers the investment risk – but you also need to keep in mind each member’s Risk Profile as well as the importance of it – here we also look at tools to assist, but also cautions to consider in the process!

As part of the investment strategy the investment risk needs to be considered, but also risk relates to the members – what is THEIR Risk profile (tolerance/general group they fall with)? All investments are a trade-off of risk and return, so risk profiling may help measure a person’s willingness to take more or less risk – in other words their tolerance from low to high risk. Often trustee/members believe they know how much risk they want to take and invest narrowly in one major class eg property or shares (or worse, with many SMSF – only cash and term deposits/fixed interest).

So are you like a Volvo driver (safe and conservative), or Rally Car Driver (eager for speed and adventure)? A financial advisor, or other sources can supply tools to help determine a person’s profile. Knowing this means trustees can invest more academically to align with member profiles.

A generally agreed grouping suggests 6 risk profiles, and examples of investment spread in the following table might be –


The amounts above are %, and each column/profile totals to 100%, that is, all the monies and how much in each asset class.

Some good free risk-profile tool can be found online – BT Risk Profiler, Suncorp, and 10thousandgirl as examples.

Mistakes with risk profiling can include forgetting to review profiles over time as people’s attitudes change, forgetting to consider future investment changes, misinterpreting tool results, forgetting the time horizon etc. For more detail about mistakes, go HERE.

What mix do you consider fits your member profiles?

What are your thoughts? Start or continue the conversation here!

Call for free education, or to speak to an advisor about your specific situation. SuperBenefit works with SMSF trustees to CONNECT them with the advisors they need. A call is FREE. If you have any questions, why not give us a call – it’s FREE!

No obligation. 0407 361 596, Paul.


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
This entry was posted in Masterclass SMSF, Super Tax, Superannuation General and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s