Self-Managed Super Fund (SMSF) investors need to be made aware of a scheme that is being promoted across the country. Investors are being advised to borrow to buy off-the-plan property, misleadingly offering high rewards and promising little to no risk. For many, this has ended in unnecessary financial losses.
Bernie Ripoll of Financial Rescue identified that a combination of the following key warning signs suggests that advice might be risky;
+ In-house accounting
+ Borrowing from the same place that gave the advice
+ Buying a property chosen by the adviser
+ Buying off-the-plan
He has warned investors to be aware of cold calling, unsolicited emails and investment seminars that offer a promise of motivational speakers, investment experts or self-made millionaires who will give you expert advice on investing.
The people involved in these activities are generally offering a “once in a lifetime” or “too good to be true” investment program that promise SMSF investors unparalleled returns if they borrow large sums and set up an SMSF to buy their off-the-plan property offer. In fact, these investments are high risk, not appropriately rewarded and should be avoided. “If you invest, it is unlikely to end well.” Said Mr Ripoll
“To protect yourself from such schemes, ensure the advisor is registered with ASIC. If they are not on the ASIC register then they are not able to legally give any financial advice, and should not be trusted.” Said Mr Ripoll.
“Financial Rescue has seen an influx of clients who have ended up losing their retirement savings in these type of schemes, and has had success in lodging claims with the Financial Ombudsman Service (FOS).” Said Mr Ripoll. ASIC has a list of “companies you should not deal with”. Mr Ripoll advises investors to check this list before engaging in any financial services and avoid taking financial advice from any companies on this list.