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SMSF property pimps in the firing line

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Australian Broker | 19 Apr 2013, 06:00 AM Agree 0
ASIC's announcement that it will be coming down hard on SMSF property 'spruikers' has been met with a chorus of hoots and yawns
  • stephen mcclatchie | 19 Apr 2013, 09:58 AM Agree 0
    Interesting article, I attended an SMSF training seminar yesterday and thought i would be learning about a lenders SMSF product and all the 2 hours was about was trying to secure my database so the company hosting the event, Investors Direct could market my database to sell them supposedly good investment property via an SMSF structure they were selling. Spruiking?? Oh and they proudly offered me the lowest referral commissions in the industry.
  • Chris C | 19 Apr 2013, 10:10 AM Agree 0
    I fully agree ........ many times over the last few years of slow property sales, I have had clients come to me with Superfund purchase scenarios that did not make sense for many reasons but because their 'real estate agent' had told them they could buy it in Super because that's where they most likely held their deposit, they were keen to try. Referral to their Accountant and/or Financial Planner in most cases, suggested it was not the best way to go. In these cases, the client was better off purchasing outside super for gearing and a much better return. I lost quite a few deals but I am happy my client is better off for it. Not knocking all real estate agents of course; many do the right thing but there are still a few cowboys out there willing to promote things to which they are not qualified or licenced.
  • Papery | 19 Apr 2013, 12:40 PM Agree 0
    Bring it on....Im seeing too many less than sophicated people geting led to the SMSF property gearing trough by sales people not claiming to give advice but doing exactly that & playing down the FP's role, especially when it comes to the diversification & risk piece...just bec they hve enough of a deposit in their Super! and lets not get started on disclosure & conflict!
  • Mark S | 19 Apr 2013, 01:11 PM Agree 0
    The problem is not SMSF which is a great vehicle for purchasing investment properties. The problem really is the property spruikers pushing new investment unit purchases through SMSF. There are a few operating in Sydney who heavily promote buying new investment units around the country through SMSF as that is where the clients hold large deposits. These property spruikers are a sales force for property developers, offering high commission to a referer (up to 2%) and keeping 3-4% for themselves, so clients end up paying 5-6% above the true property value. I went along to one promotion session to see what it would be like, and although there might be some good properties, I think generally they are overpriced so as to enable the high commissions. When I asked how the valuations stacked up when organizing finance, they admitted values were coming in lower than purchase price, but that was OK as usually the borrowers had enough fund in their SMSF to cover the difference!
  • Peter D | 19 Apr 2013, 08:11 PM Agree 0
    Stephen.
    I think you have given an unfair appraisal of Investors Direct at that seminar.
    I was in attendance and stayed to the very end (it did run overtime).
    Sure they did a bit of self promotion, but isn't that what every company does if they are hosting the event?
    Your not obliged to run with anything, and they certainly did not pressure you to take up their product.
    Some of the information was helpful and it gives some thought on alternative income streams.
    The SMSF is only one component of alternative funding and that message was made loud and clear, at the commencement, during and at the end of the session.
    They promoted, prior to the event, four subjects they would discuss from various speakers and they did.
  • Thomas | 19 Apr 2013, 08:53 PM Agree 0
    Hallelujah!

    ASIC has finally decided to at least announce it's interest in cracking down on non-AFSL licenced property spruikers suggesting geared SMSF property strategies to investors that inherently involve significant undisclosed risks... risks such liquidity, gearing, compliance and investment risks such as lack of diversity... With little to no consideration of investors goals and objectives, their lifestage or risk profile.

    The sooner ASIC start shutting down non-AFSL licenced property spruikers from suggesting that someone establish a SMSF to purchase property or that one purchase a property within an existing SMSF, the better for those investors who may otherwise be caught up in a costly situation.
  • Drew Grosskreutz | 20 Apr 2013, 06:27 PM Agree 0
    The general public, and brokers referring to these spruikers don't realise they are making up to $50,000 per property. It is such an issue in Qld at present. The BGL guy is misinformed, it is an issue that needs major attention.
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