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SMSFs diversifying across property

Fractional property fintech BrickX has revealed SMSFs are using its platform to expand their existing property portfolios by using a geographically diversified approach, which in turn spreads their risk across different properties.

“That’s where we’re seeing really good early success,” BrickX chief executive Anthony Millet told selfmanagedsuper.

“We’re seeing people put their SMSF funds into BrickX where some of them are investing in a single property, but many are also diversifying across a number of properties.

“Our SMSF investors range from those that have put in a few thousand dollars to those investing $50,000, but what we’re also seeing is that every time we bring a new property to the platform we’ve got investors, who already have an exposure, putting further funds in – so continuing to diversify across their portfolio.”

Millet said since its launch, the platform had experienced some early wins in terms of interest and usage.

“We’ve got over 2500 investors where SMSF money accounts for over 10 per cent of funds on the platform,” he revealed.

“We think that’s quite significant.”

While its SMSF client base has been all direct investors, BrickX is now awaiting a rating from SQM Research and then will look to be added to approved product lists.

“We want to engage with advisers because we think we now provide a very viable solution to advisers, in contrast to the investor who says they want to invest their SMSF in residential real estate where the adviser is often undermined because they believe it may not be the best strategy from a diversification point of view,” Millet said.

“We’re customer-centric and we’re quite excited by the direction that advisers are moving in terms of fees paid on advice and not paid on the commission of product, because our offering makes a lot of sense and therefore will be popular with advisers.

“So by not having adviser fees in our model, we can keep returns as high as we can.”

He added the residential market was worth $6 trillion and made up of about one-third investment properties, and residential real estate continually, over most periods, outperformed all other asset classes.

“Our view is that yes, we have a housing shortage, but the reality is that the very popular areas are the areas that continue to outperform and are the areas where people want to live, so you can’t do anything to deal with the shortage in those areas,” he said.

“So the investment market in what we would class as blue-chip suburbs will continue to be a very attractive investment option and we want to be able to provide access to them.”

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