SMSF Investment Strategy: Impact of 2026 reforms

Natasha Panagis

Senior SMSF Education Specialist

The Government's recent SMSF reform announcement included a proposal that has probably prompted a few trustees to wonder whether more paperwork is on the way when it comes to investment strategies. Before jumping to conclusions, it's worth taking a closer look at what has actually been announced and what it might mean in practice.

At this stage, the details are limited. The Government has announced that SMSFs will be required to have a written investment strategy upfront and that it will consult on ways to improve the quality and integrity of investment strategies. Exactly what those changes will look like remains to be seen.

The good news is that many trustees may already be doing most of what the Government is aiming to achieve. If your SMSF has a well-considered investment strategy that genuinely reflects your circumstances and guides your investment decisions, these proposed reforms may not require a major rethink.

Why is the Government focusing on investment strategies?

The proposed reforms follow the collapse of Shield and First Guardian managed investment schemes and form part of a broader package aimed at strengthening protections across the super system. The Government wants greater confidence that trustees understand how their retirement savings are being invested and that appropriate governance processes are in place.

Investment strategies are an important part of that framework.

While many trustees think of an investment strategy as a compliance document that gets reviewed by their auditor each year, its purpose is much broader. An investment strategy should explain how the fund intends to invest, what it is trying to achieve and why those investments are appropriate for the members of the fund.

The Government's focus on improving the integrity of investment strategies suggests it is looking beyond simply requiring a document to exist. Instead, the emphasis appears to be on ensuring strategies are meaningful, tailored and genuinely used by trustees when making investment decisions.

Don't SMSFs already need an investment strategy?

Yes.

In fact, SMSF trustees are already legally required to formulate, regularly review and give effect to an investment strategy for their fund. Super law requires trustees to consider factors such as risk, return, diversification, liquidity, liabilities and insurance when developing that strategy. Learn more about what an SMSF investment strategy is and why it is needed here.

Your investment strategy is essentially the roadmap for your SMSF's investments. It documents what the fund is trying to achieve and how those objectives will be pursued through its investment decisions.

That means the Government's proposal is not introducing the concept of an investment strategy. Rather, it appears to be focusing on when the strategy must be in place and on improving the quality of the strategies being prepared.

What might "improving the quality" mean?

This is the part we still don't know.

The Government has not yet explained what additional requirements might be introduced. However, the announcement does raise an important question: what makes an investment strategy genuinely useful?

Over the years, both auditors and the ATO have expressed concerns about generic investment strategies that simply repeat legislative requirements without explaining how they apply to the fund's actual circumstances. For example, a strategy that states diversification has been considered is not particularly helpful if the fund holds almost all of its assets in a single investment and provides no explanation for that decision.

Similarly, asset allocation ranges of 0% to 100% across multiple asset classes may technically satisfy a requirement to document a strategy, but they provide little evidence of a genuine investment plan.

While we do not yet know what the final reforms will require, trustees should expect increased focus on ensuring their strategy reflects their fund's actual circumstances, objectives and investments.

What should SMSF trustees do now?

There is no need to make any immediate changes. These are proposed reforms and the final rules have not yet been released.

However, now could be a good time to revisit your investment strategy and ask yourself a few simple questions:

Does it actually reflect my SMSF's current circumstances?
Does it reflect where I am in my retirement journey?
Have I considered diversification and, if my fund isn't diversified, have I documented why?
Will the fund have enough liquidity to meet expenses and pension payments?
Have I considered what happens if a member dies?

And perhaps most importantly: does the strategy describe what I'm actually doing with my SMSF's money?

If the answer is no, it may be worth reviewing the strategy regardless of whether these reforms proceed.

A reminder: investment strategies are not "set and forget"

One of the most common misconceptions about SMSF investment strategies is that they only matter when the fund is established or when the auditor asks to see them.

In reality, trustees are required to regularly review their investment strategy and ensure it remains appropriate for the fund's circumstances. As those circumstances change, the strategy may need to change too.

For example, an investment strategy that was suitable while members were accumulating wealth may no longer be appropriate once pension payments commence. Similarly, major investment decisions, changes in risk appetite or significant life events may all warrant a review of the strategy.

The bottom line

While the detail is still to come, it is hoped the reforms will enhance the quality of SMSF investment strategies without adding unnecessary compliance obligations. The Government's focus appears to be on ensuring investment strategies are meaningful documents that help trustees make informed decisions about their retirement savings and properly govern their SMSFs.

Trustees who already have a tailored, well-documented and regularly reviewed investment strategy are likely to be well placed for any future changes. And for those who haven't looked at their strategy for a while, this announcement may be the perfect reason to pull it out, review it and make sure it still reflects the fund you're running today.