Australia’s peak body for buyers’ agents has issued a consumer warning about property spruikers, investment marketers and unlicensed operators who may be crossing the line between property guidance and regulated financial advice.
According to the Real Estate Buyers Agent Association of Australia (REBAA), some operators are blurring the distinction between legitimate property acquisition guidance and recommendations that should only be made by appropriately qualified and, where required, appropriately licensed professionals.
REBAA President Melinda Jennison said the association is increasingly concerned about advisers and marketers who “package” property investment recommendations together with ownership structures such as trusts, companies or SMSFs.
“Property advice and financial advice are not the same thing,” Ms Jennison said.
“A buyer’s agent’s role is to advise on the property itself, not to recommend the ownership structure through which it should be acquired.
“When conversations move beyond the property and into recommendations about whether a buyer should purchase in a trust, company or SMSF, that is a clear signal the consumer should be seeking advice from appropriately qualified professional advisers.
“In the case of SMSFs, this is particularly important because advice about using an SMSF to acquire property may require an Australian financial services licence.”
Ms Jennison said REBAA is seeing a rise in social-media-led marketing funnels that may give consumers the impression they are receiving personalised investment or structuring guidance without the safeguards that come with dealing with a properly licensed adviser.
“Consumers should be wary of anyone who claims property investing is ‘easy’, ‘low risk’ or ‘guaranteed’,” Ms Jennison said.
“It is one thing to explain a property scenario or work through property-related numbers based on information provided by the client or their professional advisers.
“It is another thing entirely to recommend that a property should be acquired through a trust, company or SMSF, or to present modelling in a way that steers a consumer towards one of those structures.
“That is where serious scope and compliance issues can arise.”
Ms Jennison said consumers should understand that decisions about ownership structures are not matters for a buyer’s agent.
“Whether a property should be purchased in a personal name, company, trust or SMSF is not a question that should be answered by a buyer’s agent,” she said.
“Those decisions should be made with the support of appropriately qualified professional advisers, such as an accountant or lawyer and, where required, an appropriately licensed financial adviser.
“This is a consumer protection issue because when unqualified or unlicensed operators move into areas beyond their remit, buyers may miss out on the protections that come with properly regulated advice, including disclosure obligations, conduct standards, and clear pathways for redress.”
REBAA is urging homebuyers and investors to ask clear questions before engaging any adviser or property professional, including:
- Are you recommending an ownership structure for this purchase?
- Should that advice instead be coming from my accountant, lawyer or licensed
financial adviser? - Are you licensed or authorised to provide financial product advice where
required? - Are you being paid by anyone other than me?
Ms Jennison said REBAA members are trained to remain within scope and to work collaboratively with a client’s broader professional team where structuring advice is required.
“We’ve come a long way as a profession. Our members understand their role, which is to advocate for buyers with integrity and independence, not to recommend financial products or ownership structures that fall outside of their scope” she said.
“If consumers ever feel unsure, they should ask questions early. There is absolutely no downside in seeking clarity before making a major financial decision.”
ENDS
For more information or to organise an interview with Ms Jennison please contact:
Bricks & Mortar Media | media@bricksandmortarmedia.com.au | 0405 801 979
