Thanks Michael,

with such a competitive market it is hard to strike a balance between providing great service and protecting yourself from clients who have little or no respect for your time.  I support methods to qualify customers, to place value on your own time and to protect your intellectual property.  It is a conundrum though because it is difficult in the early stages to identify quality prospects from others.  I imagine that there are plenty of examples where brokers feel like they have wasted their time with tire kicking prospects and where some clients might feel they waste their time with brokers who might be good sales people but no good at the "technical craft" of broking (ie product knowledge, structuring, allowing for future contingency, application and settlement admin etc).  I have run into too many brokers that are great at sales but hopeless at getting an outcome that meets requirements.  So at the same time I expect a broker to be qualifying me as a client, I am qualifying them as a competent professional.  For me trust comes after demonstration of ability to deliver.

In my particular circumstance I was referred to the broker by my financial planner and so I felt that I came, 'pre-qualified' to some extent.  Certainly sufficient to give the broker a sense of certainty that he wasn't wasting his time.  Further I gave the broker sufficient information about incomes, assets and liabilities for him to do a quick assessment on the spot, if in fact he had brought a laptop with him to do that (which he hadn't).  The initial information I was after was not much more than product information: "I want a product with the following features/attributes.  Who can do this?"  Even I was able to identify a number of lenders who had something close (some also mentioned in another thread, thanks to those who responded) and that took me 20 minutes and with none of the comparison tools available to brokers.  

I was not after structuring or strategy advice and so I expected that his product knowledge mixed with experience would have been sufficient to answer my question.

I think also I had a decreasing level of confidence that the broker was able to provide a product that would be fit for purpose.  It was a combination of things that made me feel this way.

Thanks for your explanation Michael.  I appreciate you taking the time to explain.

Jason.

Thanks that worked.

The new links are:

PBR 94313 http://www.ato.gov.au/corporate/content.aspx?doc=/rba/content/94313.htm

PBR 93035 http://www.ato.gov.au/corporate/content.aspx?doc=/rba/content/93035.htm

PBR 93707 http://www.ato.gov.au/corporate/content.aspx?doc=/rba/content/93707.htm

One where they said no

PBR 1011345133229 http://www.ato.gov.au/corporate/content.aspx?doc=/rba/content/1011345133229.htm

Yes understood,

Having been in sales I have seen that happen before.  It is frustrating because the is an opportunity cost to each sale.  Not to mention the fact that you get your hopes up.  Retailers are experiencing a similar thing with online sales where people trying things on in store then buy them cheaper online.  But if you are offering the same product I don't understand why people would cut the broker out.  If I get good service from a person I'll always use them.  I don't understand why anyone would bother going direct to a lender.

It was certainly my intention to use the broker who was doing the work for me subject to his ability to deliver.

Thanks for the explanation.  I appreciate your point of view.

Cheers,

Jason.

Thanks Terry,

I understand that this could be one approach used to qualify customers.  I would agree that qualifying is exactly what a salesperson should do in order to ensure that they are maximising their time.

BUT to claim that current regulations require that he collect all this documentation before he even start looking at products for me seemed to be a bit of a stretch.

Anyway, given your answers on a separate post it appears to be a moot point.

Thanks again,

Jason.

Hi Terry,

I had not sought advice on this because I did not even realise it would be an issue.  My train of logic was:

• If I have used equity in my home to obtain a loan for the deposit and costs to buy an investment property (and used a separate sub account for that for example) I can claim interest on that investment loan because the purpose is for investment, despite the fact that it is secured against my property.
• If I have an investment LOC secured by my investment property and there is "room" in that LOC I can capitalise interest up to my limit and claim the interest on that increased portion of the loan as a deduction.
• Similarly, if I have an investment LOC secured by my owner occupied property and there is "room" in that LOC I can capitalise interest up to my limit and claim the interest on that increased portion of the loan as a deduction.

Therefore I reasoned that if the gap that I normally make up myself each month (say $5k) is paid off my non deductible home loan (which is where it would have gone if I did not have an investment property) rather than directly onto my investment LOC then I could capitalise the interest with the "room" I have created on my investment LOC subaccount by paying down my owner occupied LOC (both secured by my owner occupied property).  I would still intend for the all the investment income to go towards paying off the investment expenses, it is just the gap that would be capitalised.

Terry from a first scan of that very hard to read (!) draft tax determination it appears that they propose to disallow this specific approach.  

Is that your understanding?

Thanks for the heads up by the way.  If this can't be done it is disappointing but will have saved me time I can focus on other things.

Jason.