Hi all
I was approached by someone who was eager to chat with me for 1 hour about property investing. I got 2 hours to kill so i agreed. and that guy started talking about what negative gearing is and how it works. I asked him if he is a financial planner and he said no.
Can anyone explain negative gearing to anyone and thus give property investment advices? Or do you have to be a financial planner to do that? I know the rules for property investing and share investing are very different….
any help much appreciated
AOHi ao,
I think it depends on the intent of the person giving you advice. If they are trying to sell you something or will receive some financial benefit from the advice then they should be appropriately licensed to provide you the advice. if its just an opinion and not directed towards your specific circumstances then it is different.
Besides, it is totally upto you to do whatever you like with that information. I will however, check with experts before acting on such advice.Come to think of it, most of us participating in these forums are giving our opinions on one thing or the other. This does not make us financial advisors/planners.
OK, first things first, was the person who was chatting running a business offering or giving financial advice in return for consideration or attempting to influence someone to do something? If yes, then they should have an AFS licence unless exempted under the statute.
Secondly, if they should have a licence and fail to do so, they leave themselves open to prosecution under the Corporations Act, not to mention the TPA. The government has these statutes in place for consumer protection for a reason.
Thirdly, the person who was chatting with you about the negative gearing may leave themselves open to a negligent misstatement action under civil law if they provide services or advice which is later relied on and causes a loss to another party. The reason most people employed in the financial services sector won't chat willy nilly is because of the risks inherent in doing so, eg see my above statement.
Fourth, as posted above, most people on forums will offer opinions on a matter, however this *may* also result in a claim for damages due to advice being relied upon and losses incurred. AFAIK there hasn't yet been a precedent involving online advice brought before the judiciary as yet, but if it hasn't yet happened then it's only a matter of time.
Fifth, also as posted above, always seek professional advice from people licenced to operate in the particular area of interest. This gives you significantly more protection if things don't work out.
The above are my thoughts, comments and opinions only. If you need advice on specific matters, consult a licenced professional within the field you need. Cheers
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