ASIC warns estate agents on SMSFs The warning comes amid growing concern about the DIY super sector's increased investment in property. The corporate regulator has increased scrutiny of the self-managed super industry, warning real estate agents that it is against the law to promote the schemes to investors. The warning comes amid growing concern about the DIY super sector's increased investment in property, which the Reserve Bank has flagged as another avenue for housing speculation and potential instability of the financial system. In a letter to the Real Estate Institute of Australia and its members, the Australian Securities and Investments Commission said it had become aware of a sharp rise in promoters recommending investors set up super schemes to invest in property. Under the Corporations Act, only someone who holds a financial services licence is permitted to give this advice. "If real estate agents are providing advice rather than factual information, they may be carrying on an unlicensed financial services business in contravention of the Corporations Act," the letter said. Providing financial product advice includes making a recommendation or a statement of opinion to a person to set up an SMSF or use an existing SMSF to purchase real property. ASIC said it was aware of some agents offering commissions or benefits to financial advisers for recommending investors use the schemes to purchase the real estate agent's properties. While it would not comment on how many cases of spruiking it was investigating, the REIA said it was aware of at least eight instances in Queensland and Western Australia. Chief executive Amanda Lynch said she was committed to working with ASIC in making sure members were aware of their obligations. The Reserve Bank said the strategy represented a vehicle for potentially speculative demand for property and raised concerns about consumer protection. Helen Hodgson, an accountant and senior lecturer at the University of New South Wales' business school, said there was a worrying regulatory gap around self-managed super funds and property investment. "If real estate agents are talking to people about investing in property through an SMSF, they can set everything up and say, 'by the way, we don't have the appropriate licence, go see an accountant'," she said. But the problem is that quite often that initial contact has happened at an unregulated level. Whether or not they are getting appropriate financial advice, who knows? There needs to be something that requires independence between a real estate agent and the person that is giving financial advice.