The corporate regulator has begun proceedings in the Supreme Court after allegedly uncovering unauthorised property investment advice.
In a statement, ASIC alleges that Richard Gardner and Advanced Wealth Financial Services provided advice to clients about:
- establishing a self-managed super fund for the purchase of a newly built investment property;
- specific properties for development; and
- specific developers or builders to build the investment property.
Additionally, ASIC also alleges that Mr Gardner received substantial commissions from the builder or developer used for building the investment property.
The statement claims Mr Gardner and Advanced Wealth Financial Services are only licensed to provide credit services and not financial services.
As a result, ASIC is attempting to restrain Mr Gardner and Advanced Wealth Financial Services from delivering financial services unless authorised. The matter will be heard in the Supreme Court in Brisbane on 12 February.
Peter Koulizos, chairman of the Property Investment Professionals of Australia, said to Smart Property Investment that he was eagerly awaiting the outcome.
In response to ASIC’s allegations relating to property investment, Mr Koulizos said he could see that, if found to be true, Mr Gardner’s advice is a conflict of interest.
“That shouldn’t be happening in any business transaction, let alone property which is one of the most expensive assets people will buy in their lifetime, so you want to eliminate that,” he said.
A need for property investment advice regulation
While Mr Gardner has been allegedly delivering financial services without a license or authority, there is no such regulation for property investment advice. This missing regulation is something that Mr Koulizos would like to see changed.
“PIPA has been advocating probably ever since its inception that we want legislation and regulation about the provision of property investment advice, which is really simple,” he said.
“All the government needs to do is classify property as a financial product, and then it’s just like if somebody was giving advice on an insurance policy or investing in shares or a managed fund.
“If you want to give investment advice on property, you need particular education qualifications to be able to do that, and you also need continuing professional development to undertake your skills and knowledge.”
Sasha Karen, Smart Property Investment, 17th Janury 2019