The banking royal commission has highlighted the drastic need for property investment advice regulation, according to the Property Investment Professionals of Australia (PIPA).
Among the myriad of revelations about unsound financial advice and dodgy operators came an example of a former planner who allegedly directed clients to purchase property from an ‘advocacy service’ of which he was the majority owner, but never disclosed.
According to PIPA, the planner was found to have not acted in the clients best interests during an audit and while subject to regulation, the provision of property investment advice generally remains a free-for-all.
PIPA chairman Peter Koulizos said anyone can set up shop as a property investment ‘advisor’ with no qualifications needed and don’t need to worry about adhering to legislation – because there isn’t any.
“While professionals such as buyer’s agents, property accountants and mortgage brokers operate within regulated environments, property investment advice does not,” he said.
Mr Koulizos told WILLIAMS MEDIA that not many Australians understand that, which is why so many continue to be taken advantage of by “unscrupulous fly-by-nighters” offering up investment ‘advice’.
He says this is costing Australians thousands of dollars.
“We’ve heard lots of stories over the years about Aussies losing hundreds of thousands of dollars because they trusted someone whose only concern was to line their back pockets,” he said.
Though PIPA has been campaigning for years to bring property investment advice into a regulatory framework, there hasn’t been much success.
“Without regulation, Australians continue to be at risk of following so called advice, that is anything but,” he said.
“Until such a time as the government takes regulation of property investment advice seriously, PIPA will continue to provide the public with warnings about only working with ethical and professional industry practitioners.
“PIPA has developed codes of ethics and conduct, which all our members voluntarily agree to abide with, as well as professional standards of accreditation and education for the property investment industry, including a Property Investment Adviser Accreditation Course,” he said.
PIPA’s code of conduct requires members to disclose commissions to their clients and to act in their best interests, offering investors confidence.
Politics, The Real Estate Conversation, 2 May 2018