Brokers called on to help raise standard of property investment advice

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The Property Investment Professionals of Australia (PIPA) has announced a strategy to raise the professional standard of property investment advice and is calling on mortgage brokers, among others, to help.

PIPA chairman, Ben Kingsley, says the association is calling on all professional practitioners – including mortgage brokers, financial planners, accountants and estate agents – to ‘join forces and increase the professionalism’ of the property investment industry.

“There are more than 80,000 professionals, employed either directly or indirectly within the property investment industry, giving opinions and advice to consumers. However, our figures indicate that less than 1% of those are actually formally qualified to offer direct property investment advice.”

Credit Ombudsman Service Limited (COSL)’s annual report says it’s had to deal with complaints from consumers given bad property investment advice.

“We are investigating a number of complaints about Australian Credit Licensees who operate mortgage broking, investment property advice and real estate businesses under separate but related corporate entities.”

MFAA CEO, Phil Naylor, says he understands what PIPA’s getting at and that the MFAA supports the proposition.

“Property investment advice is unregulated and PIPA is lobbying to have it regulated – we would support them on that.  In the meantime, they are encouraging people involved in property investment advice to undertake PIPA’s own qualification.  If that helps to ensure there is a better standard of property investment advice to consumers, that is to be commended.”

Naylor says mortgage brokers providing property investment advice (qualified or not) need to be careful there is no conflict of interest between the provision of property investment advice and the provision of credit advice.

Kingsley agrees, noting that, unlike the areas of financial planning, real estate and mortgage broking, the provision of property investment advice continues to be unregulated – and says anyone can offer an investment opinion.

 “PIPA will continue to lobby the Australian government to regulate the property investment industry – and this is top of our agenda in 2013. But in the meantime, we’re calling on members of the industry to work together to protect our reputation and help consumers seek out qualified professionals who have both the educational and ethical standards required to provide quality advice on property.”

Kingsley says that, as one of the most common investment selections among Australians, the fact that property remains an unregulated asset class is ‘ludicrous’.

“Australians deserve accurate property investment advice and a directory of appropriately qualified professionals they can trust.”

Over the coming months, PIPA will be undertaking a process calling on professionals – including mortgage brokers - to up-skill or obtain recognition for their skills, and become a Qualified Property Investment Adviser (QPIA).

PIPA will also ‘ramp up’ its presence within the public domain and provide its members with a greater ‘voice’ through increased media and advertising activities, promoting the benefits of seeking out a qualified professional to consumers.

“Those who have the QPIA accreditation can not only claim to be ethical, qualified practitioners; they will have a significant head start when it comes to attracting new enquiries.”

 

  • iMac on 22/01/2013 1:28:00 PM

    There are powerful forces at work that maybe don't want Investment Property (IP)to be regulated. Think of ALL the EXTRA COMPLIANCE for a Mortgage Broker or Real Estate Agent, who just want to sell an investment property, that the Bank valuer says is reasonable value.
    As soon as IP is regulated, you watch all the Fin Planners suddenly get on the band wagon.
    And Ah guys, remember the banks valuation ? That indicates to buyers if the Investment Property (IP)in reasonable value. If its reasonable value why should we not recommend it.
    It seems making an honest profit is a criminal offense the way some of you carry on.

  • Chris C on 22/01/2013 1:07:18 PM

    Sounds great - if it will work in a perfect world but the cynical side of me sees that Mortgage brokers will have to obtain investment qualifications to give that advice (just like financial planners are now having to gain credit qualifications), our PI and costs of doing business go up and it gives the investor another avenue they can blame and sue for their own bad investment choices.

  • Nic Harrigan on 22/01/2013 12:29:32 PM

    The Property Research Institute of Australia will be launching their new independant property research reports by March in an effort to give consumers unbiased advice prior to proceeding with an investment property purchase.

    It appears there are way too many companies and individuals selling their clients over-inflated properties, and in many instances this reflects poorly on the broker who referred the client.

    Lets hope the Property Research Institute of Australia will expose those that shouldn't be selling properties in the first place.

  • Sreve McClure on 22/01/2013 10:41:44 AM

    It's a great idea and particularly relevant at a time when SMSF property borrowings are being heavily promoted.

  • Country Broker on 22/01/2013 10:27:37 AM

    Thios is a good start , to stop this related parties suitation, I am not an investment advised or estate agent and never will be , what I have is trusted referral sources which work both ways .
    What I am and always will be is a mortgage broker who has a licence and will work within that licence. I have trusted professional people who to me and take referrals from me, including an investment adviser and accounting group who are in the same building, all independantly owned and controlled. This way I have no concerns and sleep very well!!

  • Papery on 22/01/2013 10:17:06 AM

    Couldnt agree more! Govt should now leave NCCP alone & spend a good deal of its energy here where the ripp off potential of naive consumers is so pronounced, the conflits of interest & non disclosure so open to abuse, the forecasting so rubbery it bounces & it really doesnt matter how ethical the marketeers claim to be.

  • Peter Fast on 22/01/2013 10:01:20 AM

    A good start would be requiring industry participants refraining from making "factual" statements that houses have doubled in value since 1066 unless of course they offer a comparison with a house of today (with its electronic gadgets) with a wattle and daub house with only one entrance and no windows like those around in 1066.

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