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.”