SMSF Minutes

[coolcup]

Wasn't sure where to put this thread, but here goes...

For all of you out there who are investing via their SMSF - what practice do you adopt regarding minutes of investment decisions? Do you only minute purchases or sales as well? What about those of you who trade very frequently (ie short hold periods) where taking those minutes gets quite time consuming?

I'd be interested to hear what other people do with regards to taking minutes for their SMSF.

 

[sydboy007]

I'm not a too frequent trader. My understanding of SMSF minutes is to record major decisions eg insurance, investment strategy.

If your trading then fits within your trading strategy then I don't see any need to worry too much - just do a 6 monthly strategy update to ensure you are following it, and make changes if you feel things need to change.

I did decide to keep an investment journal, more so to help me remember why I bought a particular share so that as time passed I could see if the reasons were still valid. It helps when the price drops and I can revisit my investment thesis. Has helped me to hold my never through a few down swings, and helped me to sell out of 3 shares ate close to their tops in June once I decided the income yield was no longer fitting my investment criteria.

 

[tinhat]

We review our strategy once per year and minute it. Strategy has been the same the past four years. Investments in bank deposits (up to 100%) and ASX up to 95%. Each year each member is asked if they want life insurance and each year each member declines it. One member is in pension phase and so we minute that on the 1st July the previous pension is stopped, that all member funds are rolled together (previous pension account and whatever was contributed into the accumulation account the previous year) and each July 1 a new pension account is set-up for that member.

The accountant does everything, types up the minutes, gets us to sign-off on everything and puts everything into an annual report. Accountant plus auditor plus actuary certificate cost $3,000 last year.

 

[Julia]

The investment strategy and the minutes are two separate things.

My initial investment strategy was so simple all it essentially said was that the Fund exists to provide retirement benefits to the members and all investment decisions would be made according to market conditions with that as fundamental consideration. This allows you to make changes as required without having to resort to onerous administrative additions.

For the minutes my accountant does this when he does the annual tax return and audit. It covers everything necessary and saves me the trouble.

 

[coolcup]

The investment strategy and the minutes are two separate things.

My initial investment strategy was so simple all it essentially said was that the Fund exists to provide retirement benefits to the members and all investment decisions would be made according to market conditions with that as fundamental consideration. This allows you to make changes as required without having to resort to onerous administrative additions.

For the minutes my accountant does this when he does the annual tax return and audit. It covers everything necessary and saves me the trouble.

Thanks for the responses to date.

Julia, I agree the investment strategy and minutes are two separate things, with the former being as flexible as possible. In relation to the minutes - is it odd that the minutes occur at the end of the year and not ongoing? I thought the purpose of the minutes was to show regular "due process" around investment decisions that are being made on behalf of the fund. I always thought therefore that they need to be done regularly throughout the year rather than backward looking at the end?

 

[Julia]

I'm sure if you want to go to the extra trouble of noting every decision as a Minute, coolcup, no one is going to mind.
If I made some momentous decisions like deciding to pour all the fund's assets into property, take out a loan, or something like that, then yes I would note that.

But I've been taking my accountant's advice on this for many years now, it all seems to work well, the auditors are fine, so I'm not interested in making work for myself.
Do whatever makes you feel OK.

 

[coolcup]

I'm sure if you want to go to the extra trouble of noting every decision as a Minute, coolcup, no one is going to mind.
If I made some momentous decisions like deciding to pour all the fund's assets into property, take out a loan, or something like that, then yes I would note that.

But I've been taking my accountant's advice on this for many years now, it all seems to work well, the auditors are fine, so I'm not interested in making work for myself.
Do whatever makes you feel OK.

Fair enough. I just wanted to understand where people's view of what the minimum standard was. On your example it seems it can be a fairly low watermark which makes it easy. Thanks for the tip.

 

[craft]

Wasn't sure where to put this thread, but here goes...

For all of you out there who are investing via their SMSF - what practice do you adopt regarding minutes of investment decisions? Do you only minute purchases or sales as well? What about those of you who trade very frequently (ie short hold periods) where taking those minutes gets quite time consuming?

I'd be interested to hear what other people do with regards to taking minutes for their SMSF.

As long as you are investing in accordance with your investment strategy then I believe all you have to do is confirm purchases and sales in the AGM notes – at least that’s what I do based on what Simple Fund spits out and the auditor has never pulled it up.

Ves would be a good person to give you an opinion or ask the tax office or accountant.

 

[blue0810]

FYI:

http://www.smh.com.au/business/smsf-trustees-will-pay-a-hefty-price-20130613-2o6xc.html