Investor education is key

Linden Toll

The president of the Australian Direct Property Investment Association (ADPIA) said the peak industry body would be focusing on investor education in 2008 and called on direct property fund managers to also devote more resources to providing investors with the tools needed to make smarter investment choices.

Speaking at ADPIA’s annual conference, Linden Toll said the strong market returns of the past few years has lead most investors to forget one very important factor: risk.

“It seems that despite what we learnt about markets in the 1980s, we fell again into the comfortable trap of high returns without considering what risks might lie ahead. The stories of people losing money on not one but sometimes three investment mezzanine funds, should send shudders through everyone looking to secure new investors,” Toll said.

“We need to differentiate between solid bricks and mortar property investments and those lending style propositions loosely described as property and reiterate our desire to see diversification not only of asset class but within asset class,” he said.

According to Toll, the industry needs to aim for greater investor education, and stated that ADPIA would in turn work toward the same goal in coming years.

“Unfortunately these sad losses to the mostly vulnerable at home investors or those poorly advised leave us with a responsibility that we must now address: education. It is our responsibility as an association dealing with more than $20 billion of 250,000 Australians’ hard earned investment and superannuation money, to ensure that all with a dollar to invest do so fully equipped to do so rationally, thoughtfully, and with due consideration of advice.”