Property spruiker banned from financial services

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Money Choice director Matthew George has been banned from providing financial services for three years, after ASIC found that he put his own interests above his clients’.

George was the sole director of the Melbourne-based property investment and finance business. An investigation by ASIC found instances of unlicensed SMSF advice, responsible lending shortfalls and failure to comply with credit laws.

ASIC deputy chairman Peter Kell said George advised some clients to set up a SMSF for the purpose of buying property, when he was not licensed to provide that advice.

“Mr George demonstrated through his conduct that he is not a fit and proper person to engage in credit activities,” said Kell. “This included some instances where Mr George preferred his own interests to those of Money Choice’s clients.

“We do not want to see SMSFs become the vehicle of choice for property spruikers and the action we’ve taken against Mr George should serve as a timely warning of ASIC’s intention to ensure compliance with the law.”

Between 1 July, 2010, and 23 August, 2012, Money Choice brokered residential investment loans to more than 40 clients who had purchased a unit on Queensland’s Sunshine Coast. ASIC’s investigation found in brokering some of the loans, Money Choice and Mr George had:

  • Engaged in unlicensed lending
  • Been involved in organising loans from the unlicensed developer
  • Given misleading information to lenders
  • Failed to meet responsible lending conduct obligations, including failing to verify investor’s financial situation, and
  • Failed to have adequate arrangements in place to ensure clients were not disadvantaged by conflicts of interests that arose regarding commission payments

Money Choice and Mr George have the right to lodge an application for review of ASIC’s decision with the Administrative Appeals Tribunal.

  • Tony on 22/05/2013 10:36:00 PM

    About Time - There is no excuse for making big commissions by ripping people off with over valued property.

  • Innocent Observer on 18/05/2013 9:10:26 AM

    Paul Parsons, I take it you get your info from a credible Andrew Wilson, or the REIV.

    ....I really don't know where to start with this.

    Do your research; get to understand how assets and economies work. Do some research on the history behind property (and property prices), social infrastructure and household demographics. Get familiar with past & present tax rulings (this gives a good grounding to understand some of the more peculiar events that have occured over the past 70 years).

    Don't take it personally, but you could do with some education.

  • Property industry is criminal on 17/05/2013 10:43:45 AM

    Paul Parsons, the real estate industry is a joke. Propped up by the government because it is not self sustainable, individuals are being sold asset worth $000,000's whilst representing the buyer and sell. Conflict of interest? Additionally, people are being pushed investments and provided with economic forecasts by agents with a tafe course qualification. How is it that agents can charge rediculous commissions for doing nothing? Furthermore, it is only a matter of time before a client takes an agent to court over providing recommendations to purchase a property in a falling market based on their suggestion when they have no idea how economies work.

  • Debra Qalo on 16/05/2013 4:15:29 PM

    Wow - so the toothless tiger has snarled and bitten one. I work with developers, financial planners and mortgage brokers. All I take is my REIQ commission. No trailing fees, no referral fees, no kick backs. I believe that it is the grubs looking for kickbacks and referral fees who are the ones to look out for. Most other people in the industry(ies) are good honest operators.

  • Pat on 16/05/2013 9:05:54 AM

    Paul, notwithstanding the greater grasp of spelling the FP industry seems to have over the RE industry, you must remember that we have significantly greater regulations over what we do and how.

    Tell me, to what extent do you need to disclose commissions and conflicts of interest (you know, having ownership ties with the mortgage broker, property developer, etc?)? How effective are the rules regarding underquoting? Last time I checked, pretty weak.

    Have a look in your own backyard full of cowboys before you write (poorly) any kind of critique.

  • Paul Parsons on 16/05/2013 6:42:11 AM

    Nothing wrong with flogging property. At least it is bricks and mortar. Last time I looked there was more planners loosing there right to advise than real estate agents. ASIC have come down hard on you guys in regards too fees and disclaimers so I guess it is you industry that needs the clean up not ours. Also doesnt a planner sign off on the loans not a real estate agent ????? Maybe you guys should have a look at yourselves a bit harder because it is your piers signing off on them. You hypocrites

  • Brett on 15/05/2013 4:55:28 PM

    Why only 3 years, with those breaches he should be banned from the profession for life.

  • Pat on 15/05/2013 3:46:14 PM

    Banned for 3 years. A bloke this will come back in 3 years and do it again. He will just do it a little more compliantly in the future, but still flogging related loans to buy related properties to people who shouldn't have SMSFs.

  • Drew Grosskreutz on 15/05/2013 3:20:50 PM

    About time. Any practice, how do we say 'over servicing' clients and making money from property commissions should be banned. Lets get some regulation around this area asap!

  • Innocent Observer on 15/05/2013 2:57:37 PM

    Yeah, what Colin & Andrew said.

    C'mon ASIC, let's see your teeth.

  • Colin Peterson CFP on 15/05/2013 2:18:48 PM

    Isn't it about time that advice on the purchase and selling of property be brought under and regulated by Federal Legislation?
    That way we can remove all of the spivs and white shoe brigade from the financial services arena and at least move in the direction of creating a uniformly regulated level playing field.
    Anyone who gives any form of financial advice including union representatives should need to be licensed under the same Federal Legislation with the same obligations and responsibilities to the consumer.
    I congratulate ASIC for taking action against unlicensed operators and hope to see more of the same in the future.

  • Andrew on 15/05/2013 2:17:28 PM

    Yeah! about time - property marketers are have identified a pot of gold in super and are targeting SMSF trustees and people with sufficient funds in super to setup a SMSF. They dress up a property sales pitch as investment/super advice with little or no regard of the requirements placed on an SMSF trustee and no license which allows them to do so.

    Whilst property may be an appropriate asset for some Trustees are often at the mercer of spruikers who have no interest in mapping the trustee's investment objectives, liquidity and cash flow requirements.

    Memo to ASIC - one action wont stop what I am observing as an increasingly widespread practice. Just note the number of times real estate ads claim this or that property are suitable for SMSFs. A quick call often turns into some friendly advice on how to use super to purchase these properties.

  • Chris on 15/05/2013 5:49:22 PM

    Does not make a difference; Still spruiking. Or doesn't the legislation cover twitter and what can be said or spruiked?

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