The major banks and other financial institutions could play critical role in ensuring that Limited Recourse Borrowing Arrangements (LBRAs) are not misused, a Money Management roundtable has been told.
Chase Corporate Advisory director and former Count Financial chief executive, Andrew Gale told the roundtable that if the banks and other lending institutions were to sign up to guidelines around LRBAs, many concerns could be addressed.
Speaking at the roundtable, held during the recent SMSF Association conference in Melbourne, Gale pointed to the existence of voluntary practice guidelines with respect to LRBAs.
“So we think if, for example, all the banks signed up to the voluntary guidelines in terms of what’s the process you should go through in approving LRBAs and, likewise, when one’s giving advice in that space, then the problems could be addressed,” he said.
“If what is currently a voluntary set of guidelines were followed throughout the industry and especially in the banking sector, then that would also address anything happening in the property spruiking sector, because following those guidelines you would actually weed out any of the potential areas for malpractise,” Gale said.
SMSF Association chief executive, Andrea Slattery said she believed that the voluntary guidelines had already been approved within a couple of banks.
