Mortgage delinquencies to peak in coming months
Mortgage delinquencies are expected to peak on the back of an uneven economic recovery post-COVID, a new report has reve...
As court action is taken against the founders of the Charterhill Group of companies, industry professionals are urging investors to do their due diligence when dealing with SMSF property advisers.
Director of the SMSF Club Justin Beeton said investors buying through their SMSF should do independent research before any property purchase.
“You have to do the required due diligence to ensure the property stacks up in its own right,” he said.
Investors should only make investments through their SMSF that they would be comfortable making in their own name as well, he said.
In addition, investors must seek to verify any claims or statistics promoted by property companies.
“Research the area to ensure that the information that's being provided by the person selling the property is accurate,” Mr Beeton said.
He also encouraged investors to ensure they receive a financial services guide, which must be provided by the adviser under financial services legislation.
“In the financial services guide, it should outline any conflicts of interests that exist,” he said.
“Once you identify those conflicts of interest, you can link it back to the investment to ensure that any recommendation is an arms-length transaction.”
Founder of Leapfrog Finance Dominique Bergel-Grant said investors need to ensure any person providing advice on SMSF investment holds an Australian financial services licence.
“They have to be registered with the government, so if everything goes pear-shaped, you at least have some course of action,” she said.
She warned that some operators hold themselves out as advisers despite being unlicensed.
Property spruikers frequently avoid dealing with licensed advisers because they know their product is unlikely to be endorsed by an SMSF expert, Ms Bergel-Grant explained.
“Realistically, they target the consumer public directly, knowing that those who have experience would generally say no,” she said. “If their product or service offering was that good as an investment, then financial advisers would also be happy to recommend it.”
AMP SMSF head of policy Peter Burgess urged investors to ensure companies giving advice have a good reputation and specialise in SMSFs.
“Check their credentials, check that they are a reputable organisation and ideally check that they have some expertise in terms of understanding SMSFs and they specialise in that area,” he said.
However, while investors should be alert to the possibility of dishonest operators, he said a vast majority of individuals with an SMSF tended to be experienced and well-educated in investment matters.
“Whilst there is a lot of talk out there about property spruiking, certainly our experience has been that investors get quite cautious before entering into these type of arrangements,” he said.
Ms Bergel-Grant suggested any investor who suspected their adviser was operating illegally should file a complaint.
“You'll always be requested to file a complaint first within the organisation, but if you don't have any luck, then you can take your complaint to either the Financial Services Ombudsman or the credit licence equivalent if they are mortgage brokers,” she said.
Investors looking to confirm licence details could contact the Australian Securities and Investments Commission, she said.