Finance advice
Andrew Crossley

Property investment advisors can help where financial planners cannot

By Andrew Crossley

Many people turn to financial planners or advisors when they're trying to secure their financial future - but these professionals may not be able to help you with property research and selection.

Blogger: Andrew Crossley, Australian Property Advisory Group

Many people, when they think of obtaining advice, turn to financial planners/financial advisors. Let’s bust the myth that they can help you with specific property research and property sourcing.

The financial planning industry deals with investment products (securities). Currently, the Australian Securities and Exchange Commission — ASIC — does not recognise property as an investment security, although, more recently (as of late 2013), property in an SMSF (self-managed super fund) is a financial product.

ASIC (an independent Commonwealth Government body) contribute to the wellbeing and reputation of the Australian economy, helping investors become more informed and confident by ensuring fairness and transparency in Australia’s financial markets. Their responsibility includes enforcing and giving effect to the law, making information available to the public on companies and other bodies.

Generally, financial advisor licensing requirements do not permit them to provide specific property advice, or provide product. A good financial planner will generally provide advice on asset allocation of funds, of which a proportion may be allocated to property. Shares, managed funds, superannuation structures and insurance are predominately the main examples of what ASIC regulates and what financial planners may be able to advise on. It does not typically include specific property, nor does it include credit advice like mortgages.

The bigger issue for advisors is they have not traditionally been able to obtain professional indemnity insurance, to advise on specific property. They need to advise on it as an asset class but, under their financial planning licence, they cannot typically provide specific advice on specific property.

People do need advice
Literally anyone can be involved in property, which has resulted in there being many predators in the field. The property market has also attracted highly ethical people, and they are very professional. With so much noise and distraction everywhere, it is (all too often) difficult to spot the difference between the good and the bad.

A true property advisor conforms to the following
The fundamental backbone of any regulated industry should follow these key points:
• Barrier of Entry — Advisors must complete the PIAA Property Advisor Course, complete either a NSW Agents’ Representative Course, or the full course, to obtain a full license as a real estate agent (equivalent to what is required to work as a real estate agent.)
• Adherence to a code of conduct, and commitment to appropriate transparency of any vested interest, commissions, or conflicts of
interest
• Provision of professional indemnity insurance
• See that complaints procedures are managed by members
• Inclusion of a model designed to encourage and allow industry participation, and develop greater levels of professionalism (rather than a model designed simply to enforce compliance.)

All of this acquired knowledge culminates in an individual who has the adequate education to allow the professional indemnity insurance provider to then provide them with cover. The fact that a person is eligible for professional indemnity insurance sets them apart from everyone else. Those in the industry who are not eligible to receive property indemnity insurance should not, and must not, provide property advice.

The above is an extract from Andrew Crossley's new book Property Investing Made Simple. Stay tuned for part 2 of this series on property advice.

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About the Blogger

Andrew Crossley

Andrew Crossley

Andrew Crossley is a property investment advisor and property advocate and the founder of Australian Property Advisory Group, specialising in representing the buyer not the seller. He is also the author of the #1 International Amazon Best Seller ‘Property Investing Made Simple’ comprising of the 7 key tips to reducing property investment risk and create real wealth. (Busybird Publishing, $24.95). For more information visit www.australianpropertyadvisorygroup.com.au

 

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  ["title"]=>
  string(72) "Mortgages in a tighter lending economy and why Brisbane is a good option"
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Tune in to the latest episode of Property Showcase, the podcast with the inside track on the products and businesses that will help turbocharge your portfolio, maximise returns and make your overall investment experience seamless and stress-free!

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To hear more about these services, make sure to tune in to this episode of Property Showcase!

 Make sure you never miss an episode by subscribing to us now on iTunes!

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Son Pham is the accredited Head of Mortgages at Rethink Financing\/Rethink Investing. He has over 6 years\u2019 experience writing loans, over 12 years in the wealth management industry working for the likes of CBA, AMP and private practice and he is also a licenced financial planner (AFSL 326450). He has multiple investment properties that are cash flow positive which help pay his mortgage on his home and fund his lifestyle.<\/p>\r\n

Son is able to write all types of residential and commercial property loans.<\/p>\r\n

In this episode of Property Showcase, head of mortgages at Rethink investing Son Pham joins host Tim Neary to unpack how an investor should approach getting a mortgage in place with banks tightening down on serviceability.<\/p>\r\n

Hear from\u00a0Son\u00a0about:\u00a0<\/p>\r\n

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  • The pitfalls that he has seen people get into<\/li>\r\n
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    Whether it\u2019s building a successful property portfolio or investing in one of their Development Funds, Open Corp can help you through every stage of your investment journey. The team has 40 property specialists who collectively have been involved in over $4 billion worth of property transactions and the acquisition of more than 8000 homes and investment properties.<\/p>\r\n

    In this episode of Property Showcase, director of investment services for Open Corp Michael Beresford,\u00a0joins\u00a0editor of Real Estate, Tim Neary to share why he disagrees that the cooling market means that the best times are behind us.<\/p>\r\n

    In this episode, hear from\u00a0Michael\u00a0about:\u00a0<\/p>\r\n

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Mortgages in a tighter lending economy and why Brisbane is a good option
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Will Magee has had ambitions to enter into the Australian property market for quite some time, but it has been more than just finances holding him back.  Having been granted permanent residency just two weeks ago, Will is wasting no time and is now in the process of signing papers and finding his first investment property.

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In this episode of the Smart Property Investment Show, Will joins host Phil Tarrant to share why he is purchasing his first property in partnership with his brother, discuss the complications that can arise from such a strategy, and unpack the ongoing plan for building a joint property portfolio with his brother.

Will will also share how they approached saving for their first property, why he is taking out the mortgage in his name exclusively, and share their savings plan for the year ahead.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

RELATED AREAS OF INTEREST:

From property in Australia to a ski lodge in Japan
Mortgage Trusts, an alternative first step for property investors
Should a real estate title be in one person’s name only?

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A property investment plan years in the making
object(stdClass)#1204 (52) {
  ["id"]=>
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  ["title"]=>
  string(75) "Regional Victoria showing up Melbourne in price performance, new data finds"
  ["alias"]=>
  string(74) "regional-victoria-showing-up-melbourne-in-price-performance-new-data-finds"
  ["introtext"]=>
  string(139) "

Median house prices in regional Victoria outperformed that of Melbourne in the June quarter, the latest REIV figures reveal. 

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Median house prices in the regions rose 4.0 per cent to $419,500 but in Melbourne they dipped by 0.6 of a percentage point to $840,000.

The result in Melbourne was due to a 0.8 of a percentage point fall in prices achieved at auction; this was despite a lift of 2.3 per cent in private sales.

Inner Melbourne suffered due to auction prices, where median prices fell by 4.9 per cent to $1,459,000 but it was middle Melbourne that was hardest hit, with a 5.4 per cent drop to $974,500.

Outer Melbourne had a good quarter with the median rising by 0.5 of a percentage point to $681,000.

Apartment prices in regional Victoria grew by 3.7 per cent to $304,500 while the metro media was up by 0.5 of a percentage point to $604,000.

REIV President Richard Simpson said that despite fewer sales, many sectors of the market were performing well.

“2017 was a bumper year and while the trendline has flattened, despite the fall in median house prices in the June quarter, median prices are still up this calendar year for both houses and units, in Melbourne and in the regions,” Mr Simpson said. 

In particular there was been strong growth in regional centres which is probably due to the first-home buyers’ concessions said Mr Simpsons.

“The first-home buyers’ concession has been a boon for regional areas. A new entrant to the property market buying a house at the regional median will pay no stamp duty, while a first home buyer of an apartment in Melbourne at the median price would pay stamp duty of nearly $25,000,” he said.

Mr Simpson said that more prospective buyers are looking towards regional Victoria which is also having an effect in Melbourne.

“Melbourne’s outer perimeter continues to grow. Small increases in the June quarter mean that the median prices for both houses and units have risen over 10.5 per cent from a year ago.

Mr Simpson said moving forward that vendors need more realistic expectations as the highs of 2017 are now over.

“Negative chatter about the future of the sector coupled with stronger lending controls by financial institutions has created some uncertainty and vendors need to be realistic with their price expectations,” Mr Simpson said.

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Regional Victoria showing up Melbourne in price performance, new data finds

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