SMSF property spruikers competing with charity muggers on Melbourne street corners

SMSF property spruikers competing with charity muggers on Melbourne street corners
SMSF property spruikers competing with charity muggers on Melbourne street corners

The possibility of a taking an un-interrupted walk at lunch time in the Melbourne CBD is rare these days.

If you manage to avoid the charity muggers with their cheesy grins and clipboards, you’re more than likely to run into someone trying to hand you a flyer for a free seminar promising to make you rich through SMSF property investment.

The latest gang spruiking their free property investment seminar is Ray White SouthBank.

A short walk down Flinders Lane  and back along Collins Street and I passed at least half a dozen people dressed in Ray White branded outfits handing out fliers suggesting that I learn about property investment while enjoying a free lunch at the Rendezvous Grand Hotel on May 2.

The flyer promises a “beginner’s guide to profitable property investing” include a free “crash course” in “how to pay off a mortgage in a fraction of the time, or structure your investment by using your super fund”.

In previous months it was the Park Trent Property Group spruiking their property investment seminars with similar flyers handed out on just about every street corner.

Another round of free Park Trent webinars is taking place this week across the country promising a 90 minute conference including among other things “how to “borrow within your self managed super fund for property investment”.

This type of promotion comes as growing numbers of people look to set up a self-managed super fund to be able to invest in property – the ATO expects up to 1,000 applications a week this month and next - but with many not knowing how to do so or the risks involved.

This week, the Australian Financial Review’s superannuation writer Sally Patten highlighted some of the findings of the Centre for Retirement Research (CRR) at Boston College’s report on the $5 trillion retirement savings industry, including the issue of low levels of financial literacy when it comes to super.

“Workers will need some level of financial literacy to understand and manage their retirement accounts and the level currently appears to be quite low,” says the report which can be downloaded for free on the CRR website.

No doubt such seminars will look to cash in on this lack of knowledge, but equally, a strong desire to get onto the property market and make the returns so often highlighted in property investment magazines – though not always alongside the tragic stories of investments gone wrong.

The Ray White Southbank flyer certainly plays on this fear on missing out.

It’s first four sentences read:

“Have you ever…

THOUGHT about property investing…but where to start?

WONDERED how others have managed to get so far ahead?

WISHED you could begin accumulating property for your own financial future?

It comes as ASIC looks to clamp down on the misleading advertisement of property investment, particurlarly promotions via flyers and online ads that do not include information about the risks involved in investing or the fees or costs associated with setting up an SMSF.

Yesterday Property Observer wrote of an ASIC special taskforce investigation into the advertising of seminars in Melbourne’s sand belt suburbs prepared by a real estate agency in partnership with an accounting firm, mortgage broker and law firm.

ASIC’s chief concern is that advertising of property investment through self-managed super funds should provide a "balanced message about the returns, features, benefits and risks associated with the product" and that it protects the vulnerable from unscrupulous spruikers.

Neither the Ray White Southbank flyer, nor the Park Trent seminar I attended last year spoke of the risk of property investment.

The Ray White Southbank seminar is due to take place at the Rendezvous Grand Hotel on Flinders Street on May 2.

Coincidentally, this is the same hotel where I attended the free Park Trent seminar last year with around 50 other people, with complimentary lunch provided.

The Park Trent seminar focused on the low-risk nature of investing in property, beginning with a slide with the heading “safe as houses” and the familiar story that if you’re not investing in property now you may not have enough income to sustain you in retirement.

No mention was made of the risk of investing in property or fees involved.

Attendees were asked to tick a box on a form if they wished to receive further information and possible one on one meetings with Park Trent advisors.

The closest Park Trent came to disclosing the risks of property investment was this comment made at the end of the presentation.

“You won’t see me on A Current Affair," said the seminar presenter.

"We don’t appeal to the greedy and gullible.”

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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