Legislation and regulations for advice on property investment will be hard to achieve, despite being much needed, however, the financial services industry could still look at ways to improve the process and experience for investors.
Property Investment Association of Australia advisory board member and business manager Rosemary Johnston said the Australian property market was an unregulated area for advice and properties were also an unregulated asset, which had brought about spruikers and bad experiences.
“There’s no legislation in this area; there’s no regulator,” Johnston told the Institute of Public Accountants Tasmanian Congress in Strahan on Saturday.
“There are two things we need to regulate: the adviser and the advice, and for advice I think it’s going to be really difficult to regulate.
“Can you imagine if we had to create a legislative standard about how you [accountants] give advice?”
She said many Australians were trying to create wealth through property but were confused about where to go, who to talk to and what questions to ask.
“Part of the issue is where does financial planning [start] and where does it stop and where does accounting and taxation advice stop because if you step into that space, you could get into trouble,” she said.
“We don’t have measures about the performance of property like we do for shares, so we don’t have agreed metrics and no one is upskilling the community so that we get more sophisticated or competent investors; everybody’s learning on their own.”
It was critical that property advice was provided as a tailored service to support the client’s goals, capacity, risk profile, risk appetite and timing, she said.
“You want to teach the investor what they need to be paying attention to in the equation and if that falls over, to come and seek advice and support because maybe we can get it back on track,” she said.
