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‘Shonky’ operators eye SMSFs as trustees shun advice

‘Shonky’ operators eye SMSFs as trustees shun advice

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Miranda Brownlee
01 March 2017 — 1 minute read

The negative sentiment towards financial advice and the increasing trend of self-directed investment is seeing SMSF trustees continue to be caught up in schemes established by dodgy operators, according to an industry lawyer.

Sophie Grace Lawyers director Sophie Gerber says while SMSF practitioners can do a lot to educate their clients about some of the property spruikers and other unscrupulous operators, many SMSF trustees aren’t in the advice system.

“You have some very competent advisers but they need to be able to explain their value to potential clients, because individuals have become so sceptical of advisers more generally,” Ms Gerber told SMSF Adviser.

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“These investors want to manage their SMSF themselves, so self-directed investment is becoming a big trend.”

While financial advice clients are “becoming increasingly aware of shonky operators and very poor advisers”, Ms Gerber said these types of schemes are more actively targeting non-advised individuals in the SMSF space.

The recent investigation by ASIC into Macro Realty is one such example of this.

“Macro were actively targeting investor mum and dad kind of people to invest in the Pilbara region. That was an interesting one because ASIC had just licensed them, and then it fell apart pretty shortly afterwards,” Ms Gerber said.

“It’s very unfortunate that a lot of those issues weren’t picked up. I think it’s only a matter of time before people start to come out and say how much money they’ve lost from that scheme. It’s very still up in the air with the liquidator trying to work out what’s going on, but there will be a lot of losses.”

‘Shonky’ operators eye SMSFs as trustees shun advice
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