Many Australians consider using their SMSF to invest in precious metals such as gold and silver for security, diversification of investments and protection of wealth.
There are several steps to buying gold through a SMSF. They are
1. Contact a SMSF Specialist advisor to set up your SMSF
2. Transfer (roll over) your money into your SMSF
3. Establish a written investment strategy (a legal requirement) including precious metals
4. Select and purchase investments
5. Arrange appropriate storage and insurance
6. Complete and lodge your SMSF return on time each year.
There are a number of ways to buy gold through your SMSF.
You can purchase physical gold directly from various bullion dealers in Australia who also offer secure storage arrangements for physical gold. However, SMSF members need to be aware of the SIS requirements for a proper storage facility, which most bullion dealers provide. However, storage cannot be in your private residence. Per the Australian Tax Office, there is no requirement for a separate insurance policy. Contact your specialist SMSF specialist advisor prior
Exchange Traded Funds
An alternative to investing in physical gold is to invest in an Exchange Traded Fund, many of which are listed on the Australian Stock Exchange.
Gold Shares or Managed Funds
Like all investments, it is important to obtain advice prior to choosing a managed fund or gold shares.
Although investing in Gold through your SMSF can be an ideal strategy to diversify your investment portfolio particularly in turbulent economic times, it is important to understand the risk involved including storage of gold and the potential theft of gold bullion from your storage facility as well as the risk of breaching your compliance requirements. It is therefore imperative to obtain advice from a SMSF specialist prior to investing in precious metals through your SMSF.
If you have a question in regards to establishing a SMSF or investing in gold bullion, please give Redwood Advisory a call on 1300 790 110.
Ivan Filipovic is a Director Redwood Advisory- SMSF Specialists.
The content has been prepared without taking account of the objectives, financial situation or needs of a particular individual and does not constitute financial product advice.