The Australian Securities and Investment Commission (ASIC) released a warning to all agents this month about the importance of providing only real estate advice, particularly when dealing with Self-Managed Super Funds (SMSF) investors.
Using SMSF to purchase property is growing in popularity, and more and more agents are finding themselves in hot water. Penalties for providing financial product advice without the correct licensing can reach $34,000 and 2 years imprisonment. So, how does one assist an SMSF investor while avoiding any potentially damaging discussion?
ASIC suggests not directly advertising the benefits of SMSF investing and refraining from offering opinion on how a property should be bought.
Many companies are offering advice through financial services professionals in the form of seminars or workshops. This way they are able to build rapport with the investor, through this value add, without actually providing advice or information in an unlawful way.
ASIC insists that any statement that could be misconstrued as financial advice or opinion about SMSF be avoided. Instead, focus on the benefits of the particular properties that might meet an investors needs and use your connections to put that investor in touch with the right resources and appropriate advice.