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ASIC issues formal warning to real estate agents

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Australian Broker | 07 Nov 2013, 06:00 AM Agree 0
ASIC has issued a warning to the nation's real estate agents, saying those recommending investors use an SMSF to buy property must ensure they're appropriately licensed
  • Fat Albert | 07 Nov 2013, 11:22 AM Agree 0
    ASIC should also be warning Real Estate agents, Brokers & Builders about referral agreements and their obligations under NCCP. The practice of sales people coercing consumers who've signed contracts to meet with "their" finance person is widespread. Getting a second opinion if the client is offered and chooses to do so is one thing, but being pressured with "we have a duty of care" or "it's part of our process" that every client meets with our finance person is a completely different matter. The motivation has nothing to do with the clients financial position, it's all to do with the potential commission the referring sales person/company receive from the broker if the deal proceeds. The sales person should also be disclosing the fact that they receive a commission if the client proceeds however it never happens. How do I know? Our clients tell us - It's a regular occurrence where they get contacted by brokers without consent once they've signed contracts with a builder or real estate agent. Consumers are unknowingly being coerced by these dubious practices which could potentially exploit them and it's time ASIC put such agreements under the spotlight so that all parties involved understand and meet their obligations of the NCCP referral guidelines.
  • L3nder | 07 Nov 2013, 02:44 PM Agree 0
    This is getting ridiculous. When is the borrow going to take some responsibilty for their actions? It sounds like we Australians are so docile we need the government to protect them from any decisions we make because we might believe a real estate agent really could give us sound tax advise. Maybe we make illegal any discussions about finance or investment all together by anyone not licensed by ASIC so uncle Joe does not make a "misleading statement" to his nephew at the family bbq, or mate does not discuss it at the next poker game.
  • Broker | 08 Nov 2013, 08:18 AM Agree 0
    According to ASIC the general public is seen as unable to make their own investment decisions because we are all so stupid

    How could we all get by in our lives without ASIC, I ponder?
  • Ivan Filipovic | 27 Nov 2013, 10:03 AM Agree 0
    Interesting and ASIC came down with another crackdown today, just because there is a SMSF property on the agenda, it does not mean that you are issuing personal advice.....ASIC is beating their chest big time!
  • David | 27 Nov 2013, 10:53 AM Agree 0
    L3nder It may have escaped your attention, but ASIC is not warning off 'uncle joe'. Unless Uncle Joe is part of the transaction. ASIC is warning off professionals/accountant/ Credit intermediaries who have an interest in the outcome of a transaction, and no license to offer financial SMSF advice. These laws are in place because no matter how well each of us are ( or think we are) individually. History shows us that there are tricksters and shysters out there as well, who do prey on the naive and uninformed. Like any law is a disincentive to shysters - this seems a reasonable approach.
  • L3nder | 27 Nov 2013, 11:32 AM Agree 0
    Dear David. It did not escape my attention. Since the GFC we have run around and legislated our arses off to ensure it does not happen again. Except it was the result of greedy bankers "encouraging" brokers to write bad business by creating products out of bad lending practices, like the "1 day ABN" and the " 90/10 non genuine savings", no docs and low docs near standard pricing. But you feel if ASIC steps in and stops real estate agents saying property might be a viable superannuation alternative will be one more step closer toward utopia in the finance industry then ok. I personally don't see it that way.
  • David | 27 Nov 2013, 12:29 PM Agree 0
    A Real Estate Agent may well have the right answers - but he/she may not. Remember the RE agent is acting for the vendor - not the purchaser. The average punter should be availed some protection from the 'not' who has a position of trust & influence. That's what NCCP AFSR etc etc provide for.
    I agree GFC was athe catalyst for much of what I think has been an improvement to the credit industry. WIthout GFC, i seriously doubt that NCCP would have materialised. I can say that with some authority, I spent from 1998 till 2005 trying to convince the Feds that they needed something like NCCP which provides a machanism to get rid of shysters, and prevents them from legally participating in our industry. However I'm not aware of any law that stops something happening. All the laws do is provide a clean up mechanism. No matter how smart we are, we can't clean up until an event has happened, been reported, investigated, responsibility determined. It's the way the world works.
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