Powered by MOMENTUM MEDIA
subscribe to our newsletter sign up

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Property could ‘wipe out’ SMSF savings

Investing in property via an SMSF is an “oversold” strategy that could “wipe out” the retirement savings of trustees, according to an industry professional.

 

The overselling of SMSF properties is not confined to brokers or advisers but is happening “across the board” where a conflict of interest exists, Waterfall Financial Planning director Dacian Moses told Nest Egg’s sister publication SMSF Adviser.

“I don’t think it’s a case of ‘those nasty brokers are selling loans – they shouldn’t’, or ‘those nasty planners’ or ‘those nasty property spruikers’,” Mr Moses said.

Advertisement
Advertisement

“It’s across the board where that conflict exists: where the person initiating the process is going to make a great deal of money out of that deal going ahead,” he said. “Follow the money – who’s making the money out of this deal?”

The overselling of property investments to SMSF trustees is fundamentally an issue resulting from the lack of regulation for property investment advice, Mr Moses said.

“I constantly get spruiking emails from property stock warehouses that will say, ‘Here are another four properties in Gladstone ready to go with SMSF lends!’ or ‘Here’s a [property] in Northern NSW, just perfect for limited recourse borrowing!’” he said.

“The sales pitch isn’t so much about the properties being great investments for the trustee of an SMSF; the inducement is ‘how can I get some free commissions?’”

Mr Moses fears there will be many SMSF investors who buy overpriced assets but who will then be forced to sell at a loss.

“I think that a lot of people’s financial security in retirement will be adversely affected, if not wiped out,” he said.

“It won’t be the first time and, unfortunately, it won’t be the last.”

Property could ‘wipe out’ SMSF savings
default
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Cynic - Do you think this wasn't considered when Mr Morrison took 4 months to set the election date? It is out of our control to deliver this year. Ha!....
Anonymous - Bulldust. This sounds like leftist badmouthing the government as the ASTO has already said that even if the legislation is passed after 1 July 2019 it.......
Anonymous - Happy days are here again for all the aspirational battlers and retirees who will not be ripped off by Labor's Tax grab.....
MelbMan - We dodged a real bullet with Saturday nights Federal election result. ....