They are concerned some trustees haven’t given due consideration to diversifying their fund’s investments; this can put the fund’s assets at risk.
Lack of diversification or concentration risk, can expose the SMSF and its members to unnecessary risk if a significant investment fails.
They will ask trustees to review their investment strategy and clearly document the reasons behind the investment decisions.
They will also ask trustees to have their documentation ready for their SMSF’s approved auditor for their next audit to help the auditor form an opinion on the fund’s compliance with these requirements.