The case for regulating property spruikers

Need help with your apartment?

The financial services profession is awash with regulations designed (in part) to protect consumers from advisers promoting or recommending inappropriate products or being influenced by incentives with little knowledge of the client’s needs. Whilst most financial advisers don’t need regulations to guide their professional morality or expertise to understand a client’s circumstances and appetite for risk, regulation is needed to rein in the others. Compliance has now become ingrained in everything financial advisers do which provides confidence for investors to use their services.

Oddly however, property advisers are comparatively free of regulation or safeguards which has resulted in a trail of failed schemes, operating within a network of brokers, lenders and advisers. Most recently The AFR has reported six property projects promoted by Sasha Hopkins and the A Team which have left 130 investors chasing $23.5 million in unpaid loans and interest from collapsed schemes. The article quotes Consumer Action Law Centre chief executive Gerald Brody saying “This case demonstrates the urgent need for better safeguards in property investment and advice. Property spruikers and seminar providers have over the years caused countless investment decisions and in some cases the loss of life savings of investors.”

In the absence of better regulation of property advisers this highlights the need to seek trusted property advice from experience professionals which may be a combination of property and financial advice.

This issue has been bubbling for many years. The AFR article also stated “In 1999, an ASIC review found a strong similarity between advice about real estate and investment in shares. ASIC said there was a strong argument for comparable regulation with financial services and advice given by real estate agents to buyers about the suitability of property investment. The ASIC report did not specifically look into real estate marketers, but said there was no logical reason for them to not have the same regulations as real estate agents.”

Need help with your apartment?

Apartments Made Easy

Written by a 4th generation real estate agent Apartments Made Easy gives you the tools and tells you all you need to know about how to buy, sell, own, lease, and manage your apartment successfully.

Recent Posts

Need help with your apartment?