Broker and chair of Property Investment Professionals of Australia on responsibly advising your clients
Broker and chair of Property Investment Professionals of Australia on responsibly advising your clients
More than just a home loan shop, many brokers are expanding their service offering to meet their clients’ broader needs. One way they are diversifying is by incorporating property investment advice.
There’s no doubt that property investment advice sits nicely alongside mortgage broking. In fact, by developing the broker’s expertise in this field, they can provide their clients with a more comprehensive service offering.
However, unlike other asset classes, property is not recognised as a financial product under the Corporations Act. This means that anyone is free to potentially provide property investment advice without any qualifications or credentials or even genuine experience.
Being an unregulated domain, this territory can raise a few red flags. While some brokers may already incorporate property investment information into their service offering, it’s typically unqualified advice. And although most are well-intentioned, their property investment advice is without genuine qualification or expertise.
Just because a broker has helped 50 households to secure loans for their investment properties, doesn’t mean they are an expert in all things property investing. Brokers can destroy their reputations and potentially their whole businesses by trying to be property investment experts when they aren’t.
So how can brokers offer property investment advice in a successful and ethical manner?
Brokers can successfully diversify into property investment advice by formalising their property knowledge. There are several courses available, including PIPA’s Qualified Property Investment Adviser (QPIA) qualification. QPIA is recognised as a leading formal education and accreditation program within the industry, which comprises of six modules. The course is ideal for any practitioners looking to develop or perfect their property investment knowledge and skills, and receive endorsement for their expertise.
Another critical factor to success is full disclosure. One thing brokers should be aware of is to ensure they are working in the best interests of their clients – and this becomes more important if they are wearing two hats. If there are any conflicts of interest between the broker and the client, i.e. if the broker has a relationship with a developer or a builder and is receiving commissions rather than charging a fee for service, they should disclose this (this is also a rule under the PIPA code of conduct).
Lending is a fundamental competent of most investment actions so there is definitely a huge opportunity for brokers with multiple skill sets to expand their services in the property investment space. It just has to be done in the right way.
Ben Kingsley is the chair of PIPA and is a highly sought-after property commentator and keynote speaker in the property, money management and investment fields.
More than just a home loan shop, many brokers are expanding their service offering to meet their clients’ broader needs. One way they are diversifying is by incorporating property investment advice.
There’s no doubt that property investment advice sits nicely alongside mortgage broking. In fact, by developing the broker’s expertise in this field, they can provide their clients with a more comprehensive service offering.
However, unlike other asset classes, property is not recognised as a financial product under the Corporations Act. This means that anyone is free to potentially provide property investment advice without any qualifications or credentials or even genuine experience.
Being an unregulated domain, this territory can raise a few red flags. While some brokers may already incorporate property investment information into their service offering, it’s typically unqualified advice. And although most are well-intentioned, their property investment advice is without genuine qualification or expertise.
Just because a broker has helped 50 households to secure loans for their investment properties, doesn’t mean they are an expert in all things property investing. Brokers can destroy their reputations and potentially their whole businesses by trying to be property investment experts when they aren’t.
So how can brokers offer property investment advice in a successful and ethical manner?
Brokers can successfully diversify into property investment advice by formalising their property knowledge. There are several courses available, including PIPA’s Qualified Property Investment Adviser (QPIA) qualification. QPIA is recognised as a leading formal education and accreditation program within the industry, which comprises of six modules. The course is ideal for any practitioners looking to develop or perfect their property investment knowledge and skills, and receive endorsement for their expertise.
Another critical factor to success is full disclosure. One thing brokers should be aware of is to ensure they are working in the best interests of their clients – and this becomes more important if they are wearing two hats. If there are any conflicts of interest between the broker and the client, i.e. if the broker has a relationship with a developer or a builder and is receiving commissions rather than charging a fee for service, they should disclose this (this is also a rule under the PIPA code of conduct).
Lending is a fundamental competent of most investment actions so there is definitely a huge opportunity for brokers with multiple skill sets to expand their services in the property investment space. It just has to be done in the right way.
Ben Kingsley is the chair of PIPA and is a highly sought-after property commentator and keynote speaker in the property, money management and investment fields. 
