ASIC has announced they will be targeting real estate agents and property advisers who are making recommendations or statements of opinion to a person to use a Self-Managed Super Fund (SMSF) to invest in property.

AISC Commissioner Greg Tanzer stated that “ASIC is concerned that, with the increased popularity of SMSFs and property investment, real estate agents and property advisers may not realise that they may be carrying on a business of providing financial product advice and may need an AFS licence, or authorisation under an AFS licence, when making recommendations or statements of opinion to a person to use an SMSF to invest in property”.

In recognising a “sharp rise” in promoters recommending investors set up or use an existing SMFS to invest in property, ASIC confirmed that these promoters may not be complying with the law.

Section 911A of the Corporations Act 2001 Cth requires any person carrying on a financial services business in Australia to hold an AFS licence or be a representative of an AFS licensee. Mr Tanzer said that “a person provides a financial service if they provide financial product advice. Providing financial product advice includes making a recommendation or a statement of opinion to a person to set up an SMSF or use an existing SMSF to purchase property through that SMSF”.

If a person does not hold an AFS licence or is not authorised by an AFS licensee, they can only provide factual information to consumers in relation to SMSFs.

Australian Mortgage Fund is the responsible entity for the AMF Mortgage Income Scheme, an ASIC registered contributory mortgage fund. Contact us or download our PDS for more information on the possibility of your SMSF investing in AMF.