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Macquarie restricts SMSF loan offering

by Charbel Kadib5 minute read
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The non-major lender has said that it will only offer SMSF property lending through brokers with existing SMSF accreditation.

Macquarie Bank has announced that it will continue offering self-managed super fund (SMSF) property loans amid withdrawals from the SMSF space by several lenders — including Commonwealth Bank, Westpac and AMP — and said that it was “confident in [its] expertise in this area”.

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However, despite stating that it’s confident in its “expertise” in the SMSF space, Macquarie revealed that it will only focus its distribution efforts with brokers who “hold an existing SMSF accreditation and remain actively engaged in this market”.

“If you hold an existing SMSF accreditation with us, you can continue to submit SMSF loan applications; however, no further SMSF accreditations or transfers will be processed from today — Wednesday, 7 November,” Macquarie said.

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Moreover, the bank did not rule out further changes to its SMSF offering.

“We’ll continue to monitor the quality of all SMSF applications closely and we’ll complete a broader review of existing SMSF accreditations which may result in further changes in [the] future,” Macquarie added.

The recent bank withdrawals from SMSF lending follow concern raised by the Australian Securities and Investments Commission (ASIC) in its findings from a major review into SMSF advice.

The corporate watchdog reviewed 250 client files randomly selected based on ATO data and assessed compliance with the Corporations Act’s best interest duty and related obligations.

Property one-stop shops were identified as an area of “significant concern”.

“These models tend to promote the purchase of geared residential property through an SMSF, arranged by groups of related real estate agents, developers, mortgage brokers, accountants and financial advisers,” the report explained.

The one-stop shop model, the report said, creates inherent conflicts of interest that may affect the advice given to a client to set up an SMSF, make subsequent investments or use specific services.

“These conflicts can arise from direct or indirect commissions, referral payment arrangements, representative remuneration structures or even management pressures,” the report added.

“In light of the findings from this project, we will continue to conduct surveillance on these property one-stop shop operators and take enforcement action where appropriate.”

ASIC said that it will also work with other regulators, including the ATO and the Australian Prudential Regulation Authority (APRA), to develop a holistic approach to addressing problems that it is seeing with property one-stop shops.

[Related: Bank announces remuneration changes]

Macquarie restricts SMSF loan offering
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Charbel Kadib

Charbel Kadib

AUTHOR

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

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