Real Estate Agents Be Aware08-Jan-2014
If you are considering referring prospective clients to possibly look at buying property through a SMSF, please be cautious!
ASIC warns real estate industry about SMSFs
ASIC has warned the real estate industry that agents recommending investors use a self-managed superannuation fund (SMSF) to invest in property must ensure they are appropriately licensed to provide the advice. ASIC is concerned that, with the increased popularity of SMSFs and property investment, real estate agents may not realise they are providing financial product advice and need an Australian financial services (AFS) licence when making recommendations or statements of opinion to a person to use an SMSF to invest in property.
ASIC’s letters to the various real estate bodies warn that:
- If a person does not hold an AFS licence or is not authorised by an AFS licensee, they can only provide factual information to consumers in relation to SMSFs.
- Where an AFS licence is required, real estate agents must immediately cease offering and providing financial services or advertising the provision of financial services until such time as an AFS licence is obtained or they become a representative of an AFS licence holder.
- A person convicted of carrying on an unlicensed financial services business may be subject to a fine of up to $34,000 or imprisonment for 2 years or both. If a company is convicted it may also be liable to penalties, including a fine of up to $170,000.
Ref: ASIC Media Release – 13-340MR.