Senator John Williams said he is very concerned about the promotion of property investment through SMSFs by non-licensed businesses, such as real estate agencies, and said more needed to be done by ASIC.
“My biggest bug-bear with ASIC, certainly since I’ve been in the Senate, is the pace it moves,” he told REB’s sister title, SMSF Adviser.
“It needs to act quickly, whether it’s liquidators, financial planners or whatever.
“This is why we launched the inquiry into ASIC, because of the pace of movement [following] the whistleblower from the banks – it took them 16 months to act, and only when the whistleblower went and saw them.”
Mr Williams said he hoped ASIC would be quicker to act in future on these types of issues.
“I’ve said to ASIC to take on notice what we can do to improve its powers and if [it's] restricted in any way,” he said.
“We need to see that ASIC has all the powers required to carry out its duties.”
Mr Williams raised the issue with ASIC commissioner Greg Tanzer at the joint committee proceedings, asking what ASIC intended to do about property spruikers.
Mr Tanzer said ASIC has a “number of actions pending”, including a matter involving Park Trent Properties Group, a business that promoted the use of an SMSF to purchase investment property without an Australian financial services licence.
“We’ve also written to all the real estate institutes around Australia to liaise directly with their members and put them on notice about ASIC’s view on this,” said Mr Tanzer.
Moran Howlett Financial Planning principal Cameron Howlett told SMSF Adviser that part of the problem is that property is not classified as a financial product under the Corporations Act and so can’t be taken to the Financial Ombudsmen Service for speedy resolution.
“It’s got to be taken through the court system, which is also incredibly expensive. After having lost a lot of money it’s a very difficult path to take, so in the end it’s just easier not to do anything, which means the property spruikers end up getting away with it,” he said.