Broker calls for more transparency about kickbacks

“Currently, there is no law in this country which prevents people such as mortgage brokers, accountants and financial planners from profiting out of persuading consumers to purchase a property from a product list, even though they have no qualifications or skills whatsoever in this field,” he said.

Mr Pressley said clients generally receive no indication that their adviser stands to benefit from the recommendation – and that often the properties have little investment potential.

“Mortgage brokers and financial planners are not property investment advisors,” he said.

“An accountant is no more qualified to determine whether property ‘X’ is a good investment than a real estate agent is qualified to give tax advice,” he said.

Mr Pressley said professionals may be taking advantage of their clients.

“Let’s face it, in many cases it wouldn’t be too hard for them to persuade someone to buy one of the properties on their product list because the relationship and a sense of trust is already established as a result of their core business as a specialist in home loans, tax, or managed funds,” he said.

He urged brokers and other advisers in the financial sector to be more transparent about their motives.

“If they want to sell real estate, go for it. Get the licence and put the sign out the front,” he said.

“But present yourself for what you are – someone selling property – not a property guru who very conveniently happens to have a list of the best investment properties out of the 9.3 million in Australia.”

Fairfax Media reported in May that brokers are demanding kickbacks of up to eight per cent from property developers.

[Related: Mortgage manager unveils real estate scheme]