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.”
All investors and not just SMSF trustees need to be careful of inappropriate investments. I wonder how many decades it is going to take for AMP shares to reach a new high and how that compares to residential. It is a pity that Fund Managers always talk through their hip pocket and expect readers to take them seriously
When is this elephant in the room going to be addressed? Why is it you can can go to a bank and ask for $10,000 of managed funds and be sensibly passed to a financial planner and handed a PDS, yet ask for $1,000,000 loan or more to buy an investment property and no advice is offered or considered? I am amazed so much effort was put into further regulating mortgage broking before property investment advice was even touched with the most minor, desperately needed regulation. Yes, far too many investors are being spriuked into high risk and low performing off the plan property purchases but unfortunately many of these purchases are being introduced by many financial planners, not just property spriukers. Yes, some sensible regulation or property investment advice is incredibly overdue. Well done PIAA for pushing this borrow a long time ago.
Isn’t it time the world looked the investor in the eye and told them, “Be careful!”
There will certainly be investors who over subscribe to property, but surely that is their right, their choice and their responsibility. If the strategy lets them down, they should be shown no mercy, granted no compensation and left to stew in their own fat.
I for one am sick an tired of more and more regulation.
The powers that be at AMP and other fund managers are in competition with “property spruikers” (and I am not one of them); could it be their vested interest is infecting their point of view?
Does the AMP want regulation because once a SFund buys property, there are less available monies for AMP to “manage” ?
Delighted to see the big end of town calling for regulation too! Property investment is the preferred asset for many clients and too many are unable to assess the credentials of an Advisor to separate them from the spruikers. A regulator with a clear message gives investors a clear choice. PIAA’s hope is that they also regulate the claims that can be made to separate the puffery of real estate from the factual requirements for property investment advice.