SMSF practitioners are reportedly being harassed by property developers offering big commissions to spruik developments.
Moran Howlett Financial Planning principal Cameron Howlett said his advice firm had been inundated by calls and emails from major developers offering commissions for spruiking property to clients.
“They’re talking about 5 or 10 per cent commissions off-the-plan – it’s just ridiculous,” Mr Howlett said.
“There are probably a few advisers out there who have shifted into that space because it’s the next way of making a quick, easy dollar – which absolutely drives us nuts.”
At a recent event held by Partners Wealth Group, the ATO’s director for SMSF risks and products, Nathan Burgess, said the ATO had also seen evidence of this practice.
“ASIC has warned that such commissions or benefits may be conflicted remuneration, and that financial advisers may be banned from receiving them,” Mr Burgess said.
Mr Howlett added that many people who came to his firm had gone down the path of setting up limited-recourse borrowing arrangements, establishing the bare trusts then realising it was not the best idea to have excessive debt in their superannuation fund.
“That’s been a legitimate concern for a lot of practices in the industry for a while, because we’re seeing it at the coalface.”