Regulate property investment advice, says AMP
Amid concerns that property spruikers are becoming prevalent in the SMSF sector, AMP SMSF’s Paul Sainsbury has said property investment advice should be regulated.
AMP shares the concerns of the regulators that property spruiking has the potential to create “disrepute” in the SMSF space, Mr Sainsbury told SMSF Adviser.
“Property [spruikers] should be subject to the same regulatory oversight as a financial planner when they give advice to trustees,” Mr Sainsbury said.
Responding to industry concerns that some SMSF trustees are purchasing property with an insufficient fund balance, Mr Sainsbury said that ultimately, the personal circumstances of the client should dictate the terms of the investment.
“The truth is there’ll be times where… it may be appropriate for a property to be part of an SMSF at a lower balance than [the ATO’s guidelines].”
However, Mr Sainsbury said that, generally speaking, SMSFs are more suited to clients with higher balances who have sophisticated needs.
“You need a larger balance in order to avoid asset concentration such as what might occur if you put all of your super into direct property,” he added.
Mr Sainsbury also said AMP is currently working to grow its advice businesses’ capability to provide SMSF advice.
“We’re doing a lot of work with our advisory network within the AMP group,” he said. “We’ve got about 4,000 accredited financial advisers that [are] undertaking a very significant amount of training … in SMSF advice right now, as well as reviewing and refining our advice strategies for SMSF[s].
“That is actually something that is highly regarded by our advisers, and they’re doing that because they’re responding to customer demand… our customers, or at least a portion of our customers, are looking for more flexibility and control with their super arrangements.”