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SMSFs seeking advice on LRBAs

08 May 2014 — 1 minute read

Despite popular belief, a new report from Heffron has revealed SMSF trustees are increasingly seeking financial advice when putting a limited recourse borrowing arrangement (LRBA) in place.

According to Heffron’s latest SMSF Borrowing Data Report, while LRBA use is growing among Heffron’s funds under administration, it continues to represent “quite a small proportion” across all Heffron’s funds.

“This is also reflected in ATO data in relation to the whole SMSF industry,” said Duane Pinches, Heffron’s head of document services.


Mr Pinches said a majority of LRBA loans put in place have been in relation to investment properties rather than commercial properties.

“Of those, 86 per cent have been advised by a financial adviser, reflecting the increasing role that financial advisers are playing when it comes to property investments,” Mr Pinches said.

“In our experience, the involvement of a licensed financial adviser in the LRBA process will generally mean that the SMSF trustee has received advice about the property investment and the ‘ins and outs’ of the LRBA structure.

“This is contrary to popular belief that SMSF trustees are entering these arrangements without any advice or guidance,” he said.

SMSFs seeking advice on LRBAs
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