To go with this week’s poll, the head of PIPA suggests brokers should give property investment advice – once they’re fully qualified
To go with this week’s poll, the head of PIPA suggests brokers should give property investment advice – once they’re fully qualified
Is it ever acceptable for brokers to give property investment advice to clients? That’s the question we’re asking brokers this week in our poll. While the issue may remain black and white to many brokers, the man leading the fight against spruikers argues that, once licensing of property investment advisors is introduced, brokers have a valuable opportunity for diversification.
“The conflict of interest concerns can be real”, Property Investment Professionals Australia Chair Ben Kingsley told MPA magazine “They’re real in financial services when you have vertically integrated business models…[like a bank that] sells through their distributors and all of them do it…Our view is very clear; if you’re qualified to give advice, then you’ll do so in the client’s best interest.”
It was recently revealed that some mortgage brokers were taking 8% cuts from developers in return for convincing clients to buy their properties. It’s essential brokers fully disclose their relationship with developers, Kingsley asserts: “our code of conduct underpins how you’re being paid; whether you’re receiving a fee for service or commission or a kickback or a referral fee: these must be disclosed to the client.” He claims this will allow clients to distinguish acceptable from unacceptable developer-advisor relationships.
Unlike broking, property investment advice is not a licensed profession; clients can supposedly take legal action against brokers who give faulty advice, and property investment advice is covered under the Commonwealth Consumer Law Act 2012. However PIPA want stronger laws, licensing of advisors, and has launched a formal education course for property investment advice, in which experienced brokers could skip certain modules.
PIPA claims almost one in three investors are looking for advice, many of whom brokers are already in contact with. Kingsley, himself previously a broker, wants others to follow in his footsteps; “lending is a fundamental component of most property investment actions, so there is definitely a huge opportunity for brokers with multiple skillsets in the property investment space.”
Is property investment advice a great opportunity for diversification or a dangerous blurring of your relationship with clients? Take our poll now!
Is it ever acceptable for brokers to give property investment advice to clients? That’s the question we’re asking brokers this week in our poll. While the issue may remain black and white to many brokers, the man leading the fight against spruikers argues that, once licensing of property investment advisors is introduced, brokers have a valuable opportunity for diversification.
“The conflict of interest concerns can be real”, Property Investment Professionals Australia Chair Ben Kingsley told MPA magazine “They’re real in financial services when you have vertically integrated business models…[like a bank that] sells through their distributors and all of them do it…Our view is very clear; if you’re qualified to give advice, then you’ll do so in the client’s best interest.”
It was recently revealed that some mortgage brokers were taking 8% cuts from developers in return for convincing clients to buy their properties. It’s essential brokers fully disclose their relationship with developers, Kingsley asserts: “our code of conduct underpins how you’re being paid; whether you’re receiving a fee for service or commission or a kickback or a referral fee: these must be disclosed to the client.” He claims this will allow clients to distinguish acceptable from unacceptable developer-advisor relationships.
Unlike broking, property investment advice is not a licensed profession; clients can supposedly take legal action against brokers who give faulty advice, and property investment advice is covered under the Commonwealth Consumer Law Act 2012. However PIPA want stronger laws, licensing of advisors, and has launched a formal education course for property investment advice, in which experienced brokers could skip certain modules.
PIPA claims almost one in three investors are looking for advice, many of whom brokers are already in contact with. Kingsley, himself previously a broker, wants others to follow in his footsteps; “lending is a fundamental component of most property investment actions, so there is definitely a huge opportunity for brokers with multiple skillsets in the property investment space.”
Is property investment advice a great opportunity for diversification or a dangerous blurring of your relationship with clients? Take our poll now!
