SMSF Investment Strategies: Why Every Doctor Needs One

If you’re a doctor working in Australia, you are probably already very familiar with superannuation. This is a percentage of your pay, which your employer sets aside and pays into your super fund each pay period. This money is added to by your employer throughout your entire working life, so that you have enough money to live off of when you retire.

Several different types of super funds exist, all of which help you to start saving for your retirement. The main types are industry super funds and self-managed super funds (SMSF). In this blog post, we are going to be focusing on SMSF, and why this is the best type of super fund for financially savvy doctors who want to maximise their financial freedom. SMSF puts you in charge by allowing you to manage your own investments. This means that you can decide exactly what you invest your money in, and develop an investment strategy that puts your financial wellbeing first.

Whilst there are a number of benefits to opting for a SMSF, it is important that you are also aware of the obligations that you have legally. Whereas with an industry super fund, compliance with super and tax laws is managed for you, with a SMSF, it is up to you to ensure you remain compliant.

We would recommend that you consult with an accountant or finance professional who is experienced in managing SMSF, as they will be best placed to advise you on the legal regulations that apply to you and how you can ensure you remain compliant.

You will also need to create a proper investment strategy, which is another one of the legal requirements for SMSF. Basically, this is a written document that outlines the purpose, objectives, and goals for the strategy. It will also describe how your assets will be allocated and invested, the parameters you will be investing within, the risks involved in your planned investments, and your anticipated return on investment. It will also outline how you will diversify your investments, whether you will need to take out any loans or insurance, and how liquidity and liabilities will be managed.

Once you have developed your investment strategy, you will need to ensure that it is reviewed regularly, and updated as and when required (for example, if you change your investments, your goals change, or other changes to the fund or strategy occur).

Your SMSF will need to be audited by a SMSF auditor before the SMSF tax return can be lodged with the ATO. Failure to comply could result in you facing financial penalties or legal action, which is why it is so important you are aware of your obligations and understand how to remain compliant.

If you’re a doctor who is looking to take the SMSF route, it is our recommendation that you seek the services of an experienced and licensed financial advisor, as they will be best placed to provide you with financial advice. As a client of Medical Wealth Planning, you can trust our skilled and experienced financial advisors will help you to create an investment strategy that will maximise your fund’s financial performance, whilst at the same time ensuring you remain compliant. To find out more about Medical Wealth Planning’s services, please book an appointment with our experienced financial advisors today.