Australian Broker forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Brokers' SMSF confusion putting Aussies' retirement at risk

Notify me of new replies via email
Australian Broker | 15 Mar 2013, 08:00 AM Agree 0
Despite the best of intentions, PIPA says many brokers are still confused when it comes to understanding who can legally guide SMSF clients in property investment
  • Mike C | 15 Mar 2013, 10:36 AM Agree 0
    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!
  • rob | 15 Mar 2013, 10:38 AM Agree 0
    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?
  • Greg R | 15 Mar 2013, 11:15 AM Agree 0
    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?
  • Country Broker | 15 Mar 2013, 11:33 AM Agree 0
    Ben Kingsley may need to understand there is no confusion as far as an NCCP licenced broker or credit representative goes , we are licenced to give credit advice only .
    The confusion surley lies with operation who are financial advisers and licenced Mortgage brokers as well , what advice are they giving and when , are they giving investment advice or credit advice??
    Property advisers and real estate agents can give neither , what this article highlights is the need for ASIC/APRA to get this cleared up, and quickly. it mote complicated when Property Advisers, Financial advisers and a Mortgage broker are all involved togetherb and with the same client ,who is giving what advice ?
  • Vince Scully | 15 Mar 2013, 11:47 AM Agree 0
    Mike and Ben both miss the point. Property is not a financial product and so not regulated by ASIC. A loan to an smsf will only be a regulated credit product if there are individual trustees. In most states being paid to encourage someone to enter a real estate transaction needs a real estate licence. It's not good for consumers but the answer is pretty clear.
  • David | 15 Mar 2013, 11:58 AM Agree 0
    Ummm, talking someone OUT of an investment is giving investment advice.
  • TMCD | 15 Mar 2013, 12:11 PM Agree 0
    Mortgage Brokers and Accountants should be aligning themselves with authorised SMSF advisers (SuperShift Affiliates) who provide strategic advice in this area everyday who understand the legislation and the overall benefits of purchasing property through this tax structure as this is not a straight forward transaction. I will also say that the typical financial planner in the market place is not a suitable candiate for clients to see as they are not qualified in relation to SMSF advice. With the right advice and sourching the right property this strategy will outweight any typical portfolio that is invested in the ASX.
  • Tandem Uehling | 15 Mar 2013, 12:17 PM Agree 0
    I think it's pretty cut and dry. I think Rob hit the nail on the head. Confusion lies with those that are confused themselves maybe.
  • steve c | 15 Mar 2013, 12:38 PM Agree 0
    this is cut and dried, unless you are correctly licensed you cannot advise on property held inside a SMSF. A mortgage broker who has the Dip Fin Svc's is not accredited to give this level of advice.
  • Financial Planner & Mortgage Broker | 15 Mar 2013, 01:33 PM Agree 0
    I am a mortgage broker and financial planner. So I understand the need for a diversified portfolio.
    What really concerns me is when Unnamed Bank BDMs come to our office to sell there SMSF Loan Product. Their sales pitch involves the clients super balance only needs to be enough to fund the deposit. Some banks even offer to setup the SMSF.
    This situation concerns me when a client is potentially getting no advice from their financial planner or accountant on setting up and putting everything into a property which they are also not getting advice on.
  • Papery | 17 Mar 2013, 02:16 PM Agree 0
    I agree with Ben & his supporters also. PPty & investment marketeers & sprukers have in my opinion a largely undisclosed conflict of interest especially when they claim to be able to do it all on the cheap. Diversification...what diversification....ongoing compliance obligations for Trustees....why a shortfall in the valuaitons,nothing matters so long as the property sale goes thru & the marketeer & developer get their fat commission.
  • NQ Broker | 18 Mar 2013, 03:52 PM Agree 0
    My understanding of this type of loan is that clients looking to get into SMSF type lending gets all the relevant advice from their Financial Planner, mortgage brokers follow the advice of the clients and their clients planners. Nothing to hard here.
Post a reply