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Giving advice could draw ASIC's ire

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Australian Broker | 18 Apr 2011, 07:00 AM Agree 0
Mortgage brokers crossing the boundary into providing financial advice could find themselves in regulatory trouble, it has been claimed
  • gmashe | 18 Apr 2011, 12:43 PM Agree 0
    This touches on a gaping hole in the regulations. Talking to consumers about real estate investments is NOT financial advice because real estate is not a financial product.

    Is this morally right? In the spirit of financial regulation? Of course not and I'd love to see all those "property investment advice" businesses regulated.

    But it's not regulated right now, so let's not get ahead of ourselves.
  • phil | 19 Apr 2011, 10:15 AM Agree 0
    Actually most financial planners under a dealership don't give financial advise on property either. Primarily because the dealership doesn't earn commission from it! During the GFC and up until now most people's only performing asset and their only asset still giving them the same income is property.
  • peterqld | 19 Apr 2011, 11:03 AM Agree 0
    Most financial planners do not give advice on property because as planners they are responsible for the advice on the product as well. I would hate to be held accountable because one house got resumed under a Government order adn the client argued that I had done my research properly. What we do though is provide advice around the financial structuring and after tax yields for clients which are consistently somewhere between 2 and 4.5% pa. IN other words, around Bank cash rates, but with a lot more potential heartache. Totally reliant on capital growth to make the investment work. Somtimes this works, sometimes it doesn't. But who would want to predict capital growth on individual houses over a 10 - 15 year period?
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