PROPERTY advice remains an unregulated environment.
There’s nothing stopping someone who can talk the talk from calling themselves an expert and advising people to part with their hard earned cash.
The Property Investment Professionals of Australia (PIPA) are lobbying for the regulation and licensing of property investment advice to put a stop to this.
But a new survey by SMSF Adviser has revealed weaker than expected support for regulation.
From a total of 469 people surveyed, more than a third believe that no regulation is necessary. 61.2 percent of the respondents felt that regulation would be beneficial, while 38.8 saw it as entirely unneeded.
PIPA chairman Ben Kingsley said it is important.
“In an unregulated market place you tend to attract operators that work for the best interest of themselves,” he said.
“Property is a high value transaction and even on a small commission rate it can have a significant windfall. People are attracted to easy money.
“Regulation ensures that anyone giving advice explains that property carries a risk, the same as any investment does.
“Most real estate agents know their limitations and work in the best interest of the vendor. The concern is in the area of property marketers, people who put on shiny suits and call themselves expert property investment advisers when they have no formal qualifications and don’t know the full depth of what is required.”
Mr Kingsley said the reluctance stems from frustration with the amount of paperwork and from operators who think they are “on to a good thing”.
“When you ask an industry that is already burdened with compliance and red tape if they want more regulation their instinct is to say no, their argument is the consumer can make informed decisions on their own.
“It is the mum and dad investors who are the primary investors.
“There are thousands of victims of schemes who would like to see regulation so they can make informed decisions with their eyes wide open.
“You could be listening to a person in a fancy suit in a fancy hotel with a polished speech but you might not be aware the transaction carries a 10 per cent commission or $50,000 hidden in the value.
“We would like to see regulation such as the disclosure of fees and kickbacks, and a minimum standard of qualification.
“The ethical operators, here for the long-term who put the client’s interests first, are coming on board. We have seen an increase in membership of over 10 per cent in 12 months so it is moving in the right direction.”
1 February 2014