A majority of the third party distribution channel believe brokers should be ‘accredited’ before they write self-managed super fund (SMSF) loans.
A recent straw poll conducted by The Adviser revealed that 80.1 per cent of respondents believe brokers should have accreditation to write these products, while 19.9 per cent of the 221 voters think otherwise.
Property Investment Professionals of Australia chairman Ben Kingsley said he was pleased to see brokers are committed to being well versed on the sector before writing SMSF products.
Speaking to The Adviser, Mr Kingsley said what many brokers don’t realise is just how complex and technical SMSF lending is.
“Mortgage brokers are in a position to write SMSF products under the NCCP regulations,” he said. “As long as they are an authorised representative of a credit licence holder or a licence holder themselves, then technically they can write SMSF products
“That said, brokers need to be skilled before they can start writing these types of products. The SMSF space is very technical. While the loan structuring is not too difficult by itself, understanding the process in which an SMSF acquires a property and how the bare trust needs to be structured is complicated.
“Failure to structure the trust right the first time could result in a catastrophe for the trustees.”
Mr Kingsley said he would like to see all mortgage brokers undertake a certain level of additional education so that they are comfortable with the sector and its complexities.
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