Brokers' SMSF confusion putting Aussies' retirement at risk

by AB15 Mar 2013

Property Investment Professionals of Australia (PIPA) says it's growing increasingly concerned over a perceived lack of regulation surrounding property investment, particularly with regard to SMSFs.

According to the organisation, financial services professionals, including mortgage brokers, remain tentative as to just who can legally guide SMSF customers through the process of investing in property.

PIPA chair, Ben Kingsley, says despite repeated public discussion, mortgage brokers and others in the financial services industry remain confused as to who can recommend property for investment within an SMSF.

“If industry professionals are confused, then what hope does that give us that consumers will navigate this investment channel successfully?”

With SMSFs attracting a growing number of Australians, many of which are looking to invest in property, Kingsley says the lack of appropriate regulation is putting the retirements of millions of Australians at risk.

“Once again, we are calling on ASIC and the federal government to get up and take action and regulate property investment.”

He admits that the vast majority of brokers, accountants and financial planners do their best to help clients make smart investment choices, a lack of regulation leaves consumers vulnerable to less scrupulous operators, namely ‘property spruikers’ and marketeers.

Furthermore, despite good intentions, Kingsley says many well-meaning professionals simply don’t have the qualifications to provide sound property investment advice.

“PIPA’s message to anyone operating in the financial services space where property investment is involved, including self-managed super, is to look after the customer where you are qualified.”

“PIPA remains dedicated to seeing property investment in Australia regulated,” says Kingsley, “But in the meantime, we are calling on financial services professionals to work together in the best interests of Australian consumers and towards the greater goal of increasing the professionalism of property investment advice in Australia.”

COMMENTS

  • by Mike C 15/03/2013 10:36:58 AM

    Couldn't agree more with Ben's comments. It concerns me greatly when I am left to try & talk individuals OUT of investing their total life super savings in single channel assets with 'zero' diversification, repeatedly advising them to seek proper financial advice from qualified CFP's & accountants. How can this be a wise investment strategy for non astute 'mum & dad investors'? (as they are referred to). It just doesnt make sense. Particularly in situations where SMSF borrowers may have no family home & very few other tangible assets other than their super!!!! Another train wreck waiting to happen. This is where the 'Liberal Free Enterprise Democracy' falls short of acceptable standards! Thank Allah I'm a 'marxist' & proud of it!

  • by rob 15/03/2013 10:38:32 AM

    quote "mortgage brokers and others in the financial services industry remain confused as to who can recommend property for investment within an SMSF"
    really? What is so confusing? Mortgage Brokers can give CREDIT advice only - not investment advice. Accountants and Financials advise according to their licences also. This is cut and dried, isn't it?

  • by Greg R 15/03/2013 11:15:22 AM

    A large part of the confusion could be said to be as a result of ASIC and its various regulations of trying to force separation of advice into financial product advice (fin planners) and credit advice (mortgage brokers) and then the industry bodies trying to protect their own turf by mudding the waters when we add in investment vehicles like superannuation.

    Is PIPA any different by trying to carve a niche as well? What is the use of providing property investment advice if it is not tied into an overall wealth creation plan which involves structures, tax, accounting, gearing and investments as well as risk protection, estate planning etc?