Be alert

[roe]

First wave of SMSF collapse buying properties with leverage.
There are more to come no doubt

http://www.afr.com/p/national/advisers_warn_on_possible_flood_EP5zhaDWEDtJbhq15cDvoL

 

[mrdobalina]

Can't read. Hits AFR pay wall

 

[Scott No Mates]

Here's the same/similar article in the SMH

Caveat Emptor.

 

[roe]

some people don't pay enough attention to the other side of leverage
that is when asset start falling or they over paid and price ain't going any where or going backward.

http://www.smh.com.au/business/inve...oon-is-over-20140718-zud8s.html#ixzz37v6cHif1

 

[landlubber]

Some tips

One. Don't have anything to do with any type of financial planner. They are all just commission salespersons and should be so called. Work it out for yourself. Do your own dd. Two. Never buy any property at or after a seminar. Three. Never buy off the plan property. Four. Never buy new property. Only buy existing properties in areas where all the land is used up already. There is nothing wrong with conservatively leveraged property in SMSF. It's not the best but it's better than vanilla superwhich amounts to saving your way to wealth which will never work.

 

[westminster]

First wave of SMSF collapse buying properties with leverage.
There are more to come no doubt

http://www.afr.com/p/national/advisers_warn_on_possible_flood_EP5zhaDWEDtJbhq15cDvoL

Those problems aren't exclusive to SMSF they are the general pitfalls of not doing proper due diligence on any deal but when playing with your Super the effects are major.

 

[Terry_w]

One. Don't have anything to do with any type of financial planner. They are all just commission salespersons and should be so called.

Incorrect. Many financial planners are just salesperson and are useless, but not all. Commissions on financial products (except insurance) have been banned now as well.

The right financial planner can add incredible value.

 

[Redwood]

I think the title of the thread says it all. Be alert - that means do your due diligence on anything you spend your hard earner money on.

If you will take reccomendations either in a SMSF or outside from an advisor, make sure you check their track record of success. What annoys me, is people who do not disclose commissions, if you are not paying an advisor a set fee ask them how they get paid?

The issues are not isolated to SMSF, its outside of super as well. The thing abt SMSF is that it is regulated, if an advisor 'recommends' property in a SMSF they need to be licensed (AFSL) or an auth rep of a license holder, if they are not then they are breaking the law and can face a penalty of $30k+ or 2 years imprisonment. Funnily enough the ASIC fine actually equates to a standard commission these people are getting on a sale of property, then add the finance commissions and you will see why so many are entering the SMSF arena. Everyday Australians are getting spruiked into buying property outside of super problem is - its unregulated....a free for all.

There are good financial planners - try to have a friend recommend a planner to talk to - if they immediately offer a free trip to Queensland - walk away!

I'm in the SMSF game, when someone speaks to us, immediately we educate the client and decide together whether a SMSF is right for you. With the property equation, this discussion can take up to 45 minutes, drawing structures etc.....if its not right and you don't understand the benefits and risks of SMSF, forget about it. Education is key, hence be alert.

Hope that helps

Agree with Westminster and Terry above on both counts

Cheers, Ivan

 

[sash]

Not a surprise ...I have been saying this for some time.

Unfortunately....this is only the tip of the Iceberg...wait till the rates rise and that combined with unemployment will prove to be double jeopardy.

It is true one has to be very careful of financial planners, buyers agents, mortgage brokers etc.
Please understand with rare exceptions that their motive is to make money...anyone who thinks otherwise is silly. Due your due diligence as always and always do what is best for YOU.

 

[landlubber]

Incorrect. Many financial planners are just salesperson and are useless, but not all. Commissions on financial products (except insurance) have been banned now as well.

The right financial planner can add incredible value.

Whilst there may be a slight chance of coming across the "right" f.p. the odds are not in the punters favour. When you cannot trust major institutions like shall we say "which bank" I think we can safely say the concept is generally broke. They should all have to wear hi-vis clothes marked "approach with caution" .LL

 

[Terry_w]

the odds are not in the punters favour.

I agree with this!

However there are some very good ones out there. I was at a SMSF seminar the other day with mostly FPs in attendance - some really good ones present but some were complete fools!

 

[redwing]

Incorrect. Many financial planners are just salesperson and are useless, but not all. Commissions on financial products (except insurance) have been banned now as well.

The right financial planner can add incredible value.

To the right client

I've enjoyed investing with our SMSF as opposed to paying a group like MLC whether they make or lose money

I have no one to blame but myself should it under-perform

 

[roe]

Regarding Financial Advisor, a while ago maybe a decade or so back when I starting out and want some solid foundation before I do anything

I went to good one at recommendation of a friend and I stressed I want service based, I paid for their time I end up paying a few K for it report and a plan. I have no issue with that and didn't think it was a waste of money

I read through it, some stuff I don't understand so I park it rather than
follow their advice.

From that report I decided to educate myself a bit more, the more I learn the more I discover some of the recommendation doesn't make sense to me well at least it doesn't look to be in my best interest.

fast forward a decade later with much knowledge under my belt I now know for sure some of those recommendations even though I paid for advice and they should act in my interest are commision based
and they are in the interest of the FA not me.

Had I followed their advice I would have lost a fair chunk of my cash in fees
and under-performance.

After that I decided my money best serve in my hand and took control of my super and all other money matter

So paid for advice if you must but be very careful and understand all the recommendations.

 

[The Falcon]

An Advisor worth paying for wont be aligned with any bank or dealer group and will have their own FSL. Ideally they will be a CA in addition to all the regular FP quals. They will charge a monthly or annual retainer - $10k per annum minimum and upwards from there seems to be the going rate. They wont flog products, and typically they will be more direct equities (incl. LIC's and ETF's) focussed much more so than Resi property. A lot of the value is around assistance with structures, insurances, SMSF management, reporting, tax and estate planning and ensuring you stick to your investment plans. Anyone promises to help you shoot the lights out should be recognised as a spruiker.

These kind of Advisors are typically for high net worth individuals and families and those on that road. I've come across both and have experience of both types of Advisors!

 

[Terry_w]

An Advisor worth paying for wont be aligned with any bank or dealer group and will have their own FSL. Ideally they will be a CA in addition to all the regular FP quals. They will charge a monthly or annual retainer - $10k per annum minimum and upwards from there seems to be the going rate. They wont flog products, and typically they will be more direct equities (incl. LIC's and ETF's) focussed much more so than Resi property. A lot of the value is around assistance with structures, insurances, SMSF management, reporting, tax and estate planning and ensuring you stick to your investment plans. Anyone promises to help you shoot the lights out should be recognised as a spruiker.

These kind of Advisors are typically for high net worth individuals and families and those on that road. I've come across both and have experience of both types of Advisors!

Well put. But this sort of person may not necesarily have their own AFSL as this is very costly to obtain and keep. There are some good dealer groups out there that are not aligned to the banks.

 

[The Falcon]

That's true Terry