Financial advisers are shedding their reluctance to offer real estate advice as more do-it-yourself fund trustees look to either buy or renovate property, and as advisers seek new revenue streams, a report has claimed.
In the past year, there has been a 25 per cent rise in the allocation of money within DIY funds towards property, the Australian Financial Review (AFR) reported today.
A recent Australian Tax Office (ATO) ruling now allows trustees to use money to fund renovations.
The AFR said some property developers are paying up to seven per cent of the purchase price as commission for referring clients.
It said property development firm Stockland has already formed relationships with four planning companies, including the country’s largest independent group, Professional Investment Services.
The newspaper said the move into property came as financial advisers faced concerns over their revenue model, which was under threat from new laws which will ban commissions from fund managers and other investment providers.
The report said the real estate industry was concerned about the encroachment of planners on their territory.
Real Estate Institute of Australia (REIA) chief executive Amanda Lynch told the AFR that the body would only have a concern if financial planners began selling property.