NSW advisory slammed by media

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A Wollongong-based financial advisory and mortgage broking group has been slammed by the Australian Financial Review (AFR) for potentially enticing clients into breaching tax laws and undermining investor protection.

Laura Dean Financial Solutions had been offering luxury international holidays to investors who took out a mortgage and bought a house using their SMSF. The company’s online and television ads depicted an investor on holiday in Hawaii, encouraging his father to take up the offer and receive a ‘free gift’ by using his superannuation fund for a limited-recourse loan to buy a house. Although the Laura Dean website, blogsite and Twitter pages all appear to have been taken offline since the story broke.

Furthermore, AFR claims laws intended to stop financial advisers from receiving commissions and replace them with fees are likely being ‘undermined’ by products and services where they don’t apply, such as property sales.

Key Media attempted to contact directors at Laura Dean this week but were told no one was available to offer media comment.

In the wake of the reports, ASFA has reiterated calls for mandatory AFS licensing for all people involved in the sale of investment products to SMSFs.

“For some time now ASFA has been concerned about the growing number of people being targeted by schemes which offer attractive incentives up front at the expense of good retirement outcomes down the track.

“Such schemes run the risk of falling foul of the sole purpose test that applies to all SMSFs. As well, provision of large incentives indicates that a property is not being sold at a fair market price.

“With more and more people entering the SMSF sector each day, it's critical the regulators address the growing concern the community has around its governance, and ensure professionals working in this area are licensed appropriately.”

  • Pat on 13/09/2013 10:11:30 AM

    GAB - I have had people say that property is:

    1. Capital guaranteed
    2. Returns 7% p.a. capital growth every year - you know, doubles every 10 years (and this is their conservative view).

  • Pat on 13/09/2013 9:10:29 AM

    Alleycat, you don't have to go to Queensland for this - I have seen the kiosks in a number of shopping centres in Sydney flogging SMSF loans; I had a new client almost sold a SMSF, loan and a specific property to buy in St Mary's within the first hour of her meeting with this mob. Thankfully she came to me for real advice. This mob, in the northern beaches of Sydney, even have an AFSL (or are at least corporate ARs of an AFSL holder). The holding of an AFSL and AR provides a perception of integrity for consumers despite the fact that holding such is not that difficult - look at AAA Financial Intelligence - they would provide an AR to anyone who breathed (before they were shut down), including ex-Storm "advisers".

  • GAB on 13/09/2013 9:05:48 AM

    Caveat emptor...maybe it should apply to everything financial, and maybe then people will be more careful and seek professional opinion before throwing all their life savings in one scheme or one asset. But property is bricks and mortar safe isn't it, you can't lose with property (eye roll).

  • alleycat on 12/09/2013 4:44:11 PM

    You better add to that Queensland property developers cold calling and spruiking their investment seminars to the unsophisticated.
    One rang me today and I said do you hold an AFSL and I was told "yes".
    I suspect that the telemarketer lied but to those who don't know better, there seems little protection for the consumer unless ASIC decides to get serious about all participants in this space.

  • GAB on 13/09/2013 11:56:25 AM

    I had some people come in some years ago.....belatedly though, as they had lost every penny from their super in a property development. A financial adviser who became a self confessed property guru rolled all their super into a SMSF...and hey presto....here one minute gone the next...all of it. Pity they didn't see me before they lost their money....but I guess I wouldn't have been very exciting. Conservative diversified portfolio versus a property can't loose 100% profit once the development is finished.

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