- PIPA welcomes ASIC investigation into SMSF advice, applauds heightened focus on property spruikers
- PIPA still concerned about provision of advice with regards to property investment within SMSFs
The Property Investment Professionals of Australia (PIPA) has welcomed the release today of the Australian Securities and Investment Commission’s (ASIC) first SMSF Taskforce findings.
PIPA has also applauded the regulator for its recognition of concerning property spruiking activities with regards to self-managed superannuation funds (SMSFs).
“With SMSF numbers growing at such a fast pace, ASIC’s decision to focus on SMSFs has been welcomed wholeheartedly by PIPA,” said PIPA chair Ben Kingsley.
The report, which focused largely on the standard of advice provided to SMSF trustees, found that the majority of advice provided is ‘adequate’ but it noted pockets of ‘poor’ advice, particularly with regards to recommendations that investors set up an SMSF in order to invest in real property.
Moreover, ASIC noted its concern regarding a rise in aggressive advertisements pushing property investment through SMSFs.
“We do not want to see SMSFs become the vehicle of choice for property spruikers. Where we see examples of unlicensed SMSF advice, or misleading marketing, we will be taking regulatory action,” said ASIC commissioner Peter Kell.
“Such news is welcomed strongly by PIPA, who has long held grave concerns about property spruikers, particularly those targeting SMSF investors,” Mr Kingsley said in response.
“As ASIC would be fully aware, reports of Australian investors suffering at the hands of unscrupulous marketeers are all too common and such cases have the potential to explode as interest in property investment via SMSFs continues to grow,” he said.
While PIPA welcomed ASIC’s heightened awareness of property spruiking, the association remains concerned about the provision of advice with regards to property investment within SMSFs.
“ASIC’s investigation found that the majority of advice provided to SMSF trustees by financial planners and accountants is adequate,” Mr Kingsley said.
“While ASIC remains comfortable for such professionals to provide advice on property selection however, PIPA believes trustees not only require but deserve specialised property investment advice.
“From PIPA’s perspective, financial planners and accountants lack understanding and formal education in relation to real property so we believe they have two choices when it comes to providing their clients with advice around SMSF property selection.
“One, they can refer their client to someone who does have formal property investment advice accreditations â€“ or they can undertake their own formal qualifications in order to deliver qualified property investment advice and a more all-inclusive service,” Mr Kingsley said.
“PIPA will continue to lobby the Australian government to regulate the property investment industry â€“ and this is top of our agenda. But for the here and now, we are calling on financial services professionals to act in the best interests of the customer, and either up skill in order to provide advice around property investment, or refer your client to someone who is appropriately accredited.”
Any professionals that provide services relating to property investment, or would like to provide such services, can become formally qualified and recognised for their expertise through PIPA’s Property Investment Adviser Accreditation Course.
NOTE TO EDITORS
The Property Investment Professionals of Australia (PIPA) is a not-for-profit association established by industry practitioners with the objective of representing and raising the professional standards of all operators involved with property investment.
Since its inception, PIPA has developed codes of ethics and conduct and professional standards of accreditation and education for the property investment industry, including a Property Investment Adviser Accreditation Course.
PIPA is actively lobbying the federal government to bring property investment advice into a regulatory framework. Until such regulation is introduced, PIPA will continue to provide the public with warnings about working with ethical and professional industry practitioners.
Kate Miller Communications