Most successful organisations in any industry have something in common… They benchmark their performance.
Benchmarking is a management tool designed to provide powerful information to key decision makers about how their current approach is working. It either gives affirmation that all is well, or an early warning that they may need to consider taking some action.
It’s no different for you managing your Self-Managed Super Fund (SMSF).
A Benchmark is a standard or point of reference against which things may be compared, measured or assessed. So “Benchmarking” is the action of comparing or measuring something against others, or an “appropriate” benchmark. The key word is “appropriate.”
Importantly, benchmarking is not a reflection on you. It is a reflection on how your current investment approach is working for you. There is no need to “bury your head in the sand.”
If you have a trusted advisor who welcomes benchmarking, it is not likely to be a reflection on them either. Your adviser is in your corner. When it comes to investments, their role is to help you decide which approach you are comfortable with, then to give you the best information available about how things are going, in a transparent way.
They can help you interpret your benchmarking reports and make decisions about the best course of action based on that information.