The Australian Securities and Investments Commission (ASIC) is continuing its scrutiny of property developers targeting SMSF trustees and in particular it is investigating incentive schemes being offered to advisers to direct these investors toward the asset class.
Speaking at the recent FPA Professionals Congress 2015 in Brisbane, ASIC senior executive leader Louise Macaulay said: “Over the last couple of years we’ve received information about property developers offering commissions to advisers to recommend investment in their property developments.
“This is likely to be conflicted remuneration and if the adviser has received this, of course it doesn’t cover the developers because they’re not covered by the [licensing] regime.
“We’ve followed this up in the instances we’ve become aware of it and we haven’t as yet gathered any evidence that the payments have actually been made, but it is something we would look at and is of concern.”
The corporate regulator is also continuing to work closely with other industry bodies within the property space to alert developers that once they encourage individuals to invest in their offerings specifically through an SMSF, it is considered financial advice has been provided and they will fall under the scrutiny of ASIC.
“We’ve written to the real estate institutes in the states and territories and commonwealth and put out a media release warning real estate agents about where the line is,” Macaulay said.
She cited the recent action ASIC took against Park Trent in the Supreme Court for promoting the use of SMSFs to buy property as an example of what could result from the corporate watchdog’s compliance actions.
