One of the biggest differences with an SMSF is that you have more control over where your super is invested. That makes understanding what you are investing in especially important.
Private credit is a good example of why.
Private credit funds generally lend money directly to businesses, property projects and other borrowers rather than investing through traditional listed markets. The sector has grown quickly in Australia and has recently attracted increased media and regulatory attention.
ASIC has been looking closely at private credit, particularly how products are described and offered to retail investors. In September, ASIC temporarily stopped offers of three private credit products because it had concerns about matters including the way risk, capital access and suitable portfolio allocations were described. Those stop orders were later lifted after changes were made to the product documents.
The broader issue is a useful one for SMSF owners to understand. Investments can differ considerably in how easily they can be sold, how their value is determined and when investors can access their money.
That can matter inside an SMSF because a fund may need cash for pension payments, tax and other expenses.
So when looking at any investment, it is useful to understand some basic facts: what does it actually invest in, how is it valued, and when can investors access their money?
The “self” in SMSF means having more control. It also means taking an active interest in understanding where your retirement savings are invested.
General information only. This article does not take into account your objectives, financial situation or needs. Consider the relevant product information and seek professional tax or licensed financial advice where appropriate.
