ASIC has issued a warning to real estate agents over SMSF
property investment, saying they may be breaking the law.
In a speech to the CPA Australia SMSF Conference, ASIC commissioner Greg Tanzer said the regulator was aware that some real estate agents and property advisers were recommending clients use their self-managed super funds to invest in property. Unless the person recommending such an investment carries an AFSL, they were in breach of the Corporations Act, Tanzer said.
"Providing financial product advice includes making a recommendation or a statement of opinion to a person to set up an SMSF or use an existing SMSF to purchase property through that SMSF," Tanzer said.
Tanzer said many real estate agents and property advisers may not be aware that they were providing financial product advice by touting SMSF property investment, but he warned that the penalties for providing unlicensed advice were stiff.
"A person convicted of carrying on an unlicensed financial services business may be subject to a fine of up to $34,000 or imprisonment for two years or both. If a company is convicted it may also be liable to penalties, including a fine of up to $170,000," he said.
Tanzer said ASIC had worked with state and territorial real estate bodies, as well as the REIA, to educate the induustry. He said the regulator was now working with individual business suspected of engaging in unlicensed conduct "to help them understand their obligations".