The mortgage broking industry appears to have created a more aggressive push into the ever-expanding self-managed super fund (SMSF) segment.
This has become evident in a recent move by the Mortgage and Finance Association of Australia (MFAA) to launch a training program to up-skill their brokers before they leap into the SMSF arena.
Although the complexity of SMSFs and the added compliance burdens that come with them are often a deterrent for some brokers, Council of Mortgage Lenders chief executive Kevin Conlon said this sector was not just on the periphery for brokers but would become be quite a significant market.
"The SMSF sector is constrained in its ability to achieve appropriate levels of asset allocation when it comes to property investment," he said.
Members tend to have either no property exposure or too much – and there would be a significant push by the SMSF sector to get more involved in property, an area where brokers play a natural role, he added.
The MFAA program itself will involve an initial free webinar – to be released at the end of this month – and the response would give a clearer idea of the type of demand from brokers, Conlon said.
MFAA chief executive Phil Naylor said he expected mortgage brokers would show a "reasonable interest" in the program.
"(Mortgage brokers) have to have a reasonable understanding of what an SMSF looks like, how they're structured and the responsibility of the trustees," Naylor said.
"Not that we're expecting brokers to get involved in setting up an SMSF, but they need to understand it because if they don't understand it they could possibly fall into the trap of providing or recommending the wrong sort of finance."
According to Naylor, the program will be accredited by the MFAA and will be managed by a professional with a background in broking and financial planning and specialist skills in SMSF lending.
Vow Financial chief executive Tim Brown said he welcomed the MFAA's initiative to improve SMSF education at a time when the Australian Securities and Investments Commission (ASIC) was bolstering its monitoring of the sector.
He said that while a number of brokers were receiving daily requests to set up SMSFs, many were still quite "green" in dealing with those types of customers.
"[The SMSF market] is an area that can be fraught with danger if you let unskilled or uneducated people loose in it, and we want to make sure our members understand that they are dealing with a different product to [that used by] their normal mum and dad borrower," Naylor said.
Conlon said recent comments made by ASIC commissioner Peter Kell at CPA Australia's SMSF Conference also highlighted the fact that the SMSF client was becoming something of a "honey pot" for less-than-reputable financial advice professionals.
He said that regardless of the channel an SMSF investor decides to go through, it is more important that the professionals they choose to deal with are properly educated.
