Art can be an attractive alternative investment, with many people buying it because of their passion and its scarcity. But is it appropriate for your self-managed superannuation fund?
Ordinarily we don’t recommend art at Omniwealth for financial planning purposes.
Investments in collectables and personal use assets such as art, jewellery, and wine cannot provide a present day benefit to the member or related parties and cannot be displayed or stored in a private residence (of the member or related parties). Often, this is the deal breaker.
Superannuation investments regardless of whether they are art, fine wine, property, securities, cash, or some other instrument must be managed for the best interests of the fund members, in accordance with the law and kept separate from all other investments of the members.
The best criteria that I could develop for investing in art or collectibles would be if the investment at least passed these three hurdles:
- You cannot see a better investment return elsewhere
- The object is so rare or so valuable that its capital value will beat the long term returns of shares or bonds
- You simply must have the object and will buy it from your SMSF at market price (arms-length) in a few years when you can afford it and hang it on your wall, above the mantel.
Regardless of an investor’s love of art or collectibles, such an investment in a superannuation structure is difficult to justify.
Genene Wilson
Senior Financial Planner
Omniwealth
t: 02 9112 4332
m: 0403 026 800
e: genene.wilson@omniwealth.com.au
www.omniwealth.com.au