More than eight out of 10 property investors support licensing for direct property advice, but fully-fledged financial planners are still underutilised, a new survey has shown.
The questionnaire produced by ifa sister title Smart Property Investment and industry body Property Investment Professionals of Australia (PIPA) – which canvassed 627 investors – found 86.9 per cent of respondents believe people who recommend property investments should require a licence.
However, despite the call for a more regulated adviser, only 27 per cent of respondents had ever visited a licensed financial planner, the results showed.
PIPA chair Ben Kingsley told ifa that property investors wanted regulated advice but believed most financial advisers could not meet their needs.
“They don't study it as part of their course content, it's not a product they can sell under their professional indemnity insurances and it's a product they are steered away from by their dealership groups,” he said.
He called for investment properties to be regulated like any other financial product.
“We would think it would fall under the Corporations Act as a licenced investment product, based on the determination of the purchase,” he said.
At least two dealer group executives spoken to by ifa agree with Mr Kingsley that direct property advice is a major missed opportunity for many advisers.
Spring Financial Group founder Keith Cullen said there was a mismatch between the demand for professional property advice and the expertise of advisers.
“It defies logic to me that we have a $1 trillion-plus investment market in residential investment property, we have 1.75 million Australians that own around 2.75 million investment properties, yet it seems that less than 10 per cent of advisers specialise in or give professional advice around that asset class,” he said.
He suggested it would be a mistake to think that investors are not interested in seeking professional help with their finances.
“In their hundreds of thousands, they're doing Google searches on various topics every month looking for advice. Yet where do they find it?” he said.
Meanwhile, Omniwealth chief executive Aaron Greaves suggested consumer demand would eventually encourage more advisers to offer property services.
“Your average client is just going to demand that their advisers be abreast of lending strategies, property advice, superannuation, insurance and the whole lot,” he said.
“If you've got an adviser who is just out there talking about asset allocation, either inside or outside super and managed fund portfolios, I think those advisers are going to struggle to get clients, going forward.”
SUBSCRIBE TO THE IFA DAILY BULLETIN
News
- 23 Oct 2017Fiducian prepares for leadership transitionBy Staff Reporter
- 23 Oct 2017Industry association for insurance tech launchesBy Staff Reporter
- 23 Oct 2017Instos ‘struggling’ with IFA ascendancyBy Aleks Vickovich
- 23 Oct 2017CBA bosses accused of incompetenceBy Aleks Vickovich
- 20 Oct 2017Parliamentary insurance group formedBy Staff Reporter
- 20 Oct 2017Treasurer introduces BEAR legislationBy Aleks Vickovich
- view all
