Property needs to be viewed as investment class asset
Property needs to be seen as an investment class asset to ensure self-managed super fund (SMSF) trustees are receiving adequate advice.
Following the release of the Australian Securities and Investments Commission (ASIC) taskforce into SMSF advice last week noting property spruiking activities in the sector, Property Investment Professionals of Australia (PIPA) chair Ben Kingsley said activity was the result of the area not being regulated as an asset class.
"It's this area that continues to remain a problem child, which is that property investment is not an investment class asset," Mr Kingsley said.
"By not having it regulated, real estate agents, developers and people who are active in this space can get very motivated by the opportunities that trustees have in investment in residential property."
Mr Kingsley said that as the boom in the SMSF sector continues, ASIC will start to increase regulation and guidance within the industry.
"I think the regulator is a little surprised at how quickly this marketplace has grown," Mr Kingsley said.
"So I think you'll see more guidance and regulatory updates form ASIC and the Australian Tax Office (ATO) in this space as it becomes more and more popular for people who want to take control of their future in regards to their retirement plan."
While PIPA have welcomed the heighted awareness of property spruiking, the association said it will continue to lobby the government to increase regulation in the industry.
Mr Kingsley also said that PIPA would be seeking information on whether property investment advisers can work in partnership with financial planners and accountants to make recommendations on asset selection without an Australian financial services licence.
"We'll be seeking some further clarification from ASIC for our members in regards to the actual property selection and the commentary around asset selection," Mr Kingsley said.