Powered by MOMENTUM MEDIA
subscribe to our newsletter
Property spruiker activity on the rise, adviser warns

Property spruiker activity on the rise, adviser warns

The number of property spruikers preying on SMSF trustees and practitioners has increased in the past year, with spruikers attempting to entice advisers with large commissions, according to one SMSF advice firm.

GEM Capital adviser Mark Draper says there’s been a huge increase in the number of property spruikers approaching his practice in the last 12 months.

About three different property spruikers will contact the firm every week in an attempt to flog property to their clients.

Advertisement
Advertisement

“They’re offering 5 to 10 per cent commissions, which should be ringing alarm bells [to any adviser],” Mr Draper said.

The increase in property spruiker activity is likely driven by the growth in property values, low interest rates and the growing amount of money sitting in SMSFs, he said.

“They’re seeing that as an opportunity. There’s a lot of money out there looking for a home and these guys are out there trying to get [that money] so [practitioners] and trustees need to be careful of that.

“I just think there are few more warning signs at the moment … in the property sector – that’s where I’m seeing the most risk.”

Mr Draper added that there has also been an increase in the number of risky unlisted property trusts with high gearing being promoted.

The increasing risk of property spruikers has also been identified by PI insurers, with insurers scrutinising financial planning firms providing direct property advice.

“I think the PI insurers are ahead of the curb. They’re seeing where the hot spots are,” he said.

[Related: Federal court bans property spruiker]

Property spruiker activity on the rise, adviser warns
mortgagebusiness

 

Latest News

Almost half of prospective home buyers are unfamiliar with key mortgage terminology, according to new Westpac research. ...

Small businesses would be “unjustifiably disadvantaged” if limited recourse borrowing arrangements were to be abolished, the CEO of a c...

This year’s Easter auction volumes were the lowest since 2012, with Sydney and Melbourne reporting the sharpest falls, according to the la...

FROM THE WEB
podcast

LATEST PODCAST: The Third-Party Lending Report in summary

Do you think the banking royal commission recommendations could negatively impact competition in the mortgage market?