Property advice is still neglected and unregulated, much to our chagrin and to the detriment of many Australian’s.
This leaves the door open to property spruikers and anyone with an interest in selling property, to market their assets as great investment opportunities under the guise of property ‘advice’.
The conflict of interest is obvious – so why are property advisors held to a lower standard than those providing advice on mortgages, insurance policies and investing in shares?
ASIC has finally cottoned on to this and it is good to see them starting to take action and prosecute a Financial Services Company for providing advice on establishing an SMSF for the purpose of purchasing a newly built investment property and off the plan. One type of property we have been warning our clients on for almost fifteen years now. ASIC alleges that substantial commissions from the builder or developer were paid to the company to provide the advice. This happens all over the country with accountants, mortgage brokers and financial planners getting large sums to recommend off the plan properties.
We have commented on these precise pitfalls of SMSF lending since it became legal in 2008 and the need for clearer guidelines and governance to protect unsuspecting Mums and Dads with small superannuation balances in particular.
The outcome is that many Australians have purchased poor quality properties, severely hampering their superannuation returns and retirement plans.
Some accountants, solicitors and financial ‘advisers?!’ who have been part of the kickbacks supply chain from developers and property spruikers might be starting to get a little bit nervous!
Our property education partner and Chairman of the Property Investment Professionals of Australia (PIPA), Peter the Property Professor Koulizos, sheds light on the need for regulation.
