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RBA zeroes in on SMSF property investment: Tread carefully

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Australian Broker | 18 Sep 2013, 07:00 AM Agree 0
The RBA's September meeting minutes have revealed a growing concern over the stability of the SMSF property investment sector
  • Rosemary Johnston (PIAA) | 18 Sep 2013, 09:56 AM Agree 0
    The spruikers must be very active to be showing up as at significant levels in the RBA stats and attracting this attention level. Is this the key driver for future regulation of this sector?

    Any SMSF property investment should stack up on its own merits for potential performance, and a sustainable holding profile. This needs to include modelling and stress testing at a variety of interest, capital gains and vacancy rates plus changes in personal circumstances.

    Professional indemnity insurance is key here for the advice component. The insurance underwriters do not back spruikers, nor real estate licences for the provision of advice. One professional course has PI available for suitable property investment advisors. This now includes a small financial planning group that has just received PI insurance to give financial planning and specific property investment advice in the same transaction.

    Property investment advice future regulation has a model in the market place that is based in FOFA principles, underwritten by insurance and supports the client's goals over their lifetime.
  • Papery | 18 Sep 2013, 11:55 AM Agree 0
    Most of the M&D SMSF who get sucked in by the spruikers do so because the spruikers 'advise (while of course not advising) & charge the individuals little if any fees relying on kickbacks from the property developers. Do the spruikers do any they refer to quality FP who can they dont...the sooner ASIC regulate what comes dripping from the property spruikers mouths the better.
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