Insurance for SMSF’s

August 22, 2013

ASIC Slams Lack of Insurance Advice For SMSFs Since August 2012, SMSF trustees have been required to review the insurance needs of members as part of the fund’s investment strategy (see: SMSFs Need Professional Insurance Advice). ASIC said that in nearly half of the files it reviewed, investors were not told by their adviser that they were required to put in place an investment strategy for the fund, or the elements this strategy should contain. Trustees are also required to regularly review and document their investment strategy, including whether or not insurance is to be provided. The regulator cautioned advice providers to explain all the duties and obligations attached to an SMSF to trustees. ASIC recommended that advice providers discuss the following with their SMSF clients, to ensure their advice is of a high quality: 1. Their existing insurance coverage 2. The level of insurance coverage they will need in future 3. The cost and options for maintaining, increasing or decreasing (as appropriate) their existing insurance coverage through an SMSF 4. Whether the investor has any health issues that may affect their ability to get insurance coverage 5. The advantages and disadvantages of retaining a portion of their APRA-regulated superannuation for insurance purposes (if considered appropriate) 6. The impact of the insurance recommendation on the investor’s SMSF balance Please contact us should you need any advice regarding the Insurance or Investment strategy of your SMSF and we can help you. Regards Kelly Howard