Noel Whittaker is a best-selling finance author, newspaper columnist and former director of Whittaker Macnaught
Are there common themes in the questions you’re asked?
Unfortunately, people all want to sell when the market is down and buy when the market is booming. So the questions tend to reflect that. For example, “My superannuation fell in the GFC; should I convert it all to cash now and reinvest it when the upturn comes?”
There’s also a plethora of questions from people who can’t run their own self-managed super funds properly and from people who think they can borrow against their residence to buy a new residence, move into it and get negative gearing benefits.
How financially literate is the average Australian? What is needed to improve this?
It’s a continuum, with 10 per cent smart, 10 per cent hopeless, and 80 per cent floundering along in the middle. Most people choose not to take financial advice except when it comes from the next-door neighbour or Fred down at the bowling club. All we can do is keep getting the message out – the ASIC Money Smart website is doing a fantastic job at this. I promote it whenever I can.
You’ve called for more regulation in the property investment industry. Why?
The property investment industry is virtually regulation-free – anyone can wake up and decide to set up shop giving advice about property investing. There is no licence required, no education or training needed and no supervisory body. There’s often a conflict of interest too.
To make matters worse, these property investment ‘advisers’ usually operate without any kind of professional indemnity insurance because underwriters refuse to provide cover for activities that are unregulated. Consequently, if you suffer a loss due to poor advice, you will have no capacity to recover that loss. ASIC provides no supervision because a property investment is not recognised as a financial instrument. I think that property spruikers at the very least should be under the same duty of care as financial advisers.
Are there other areas you believe need more regulation?
I’m not sure that regulation is ever the solution. It creates much more work for the good guys while the bad guys totally ignore it. The result is more costs for the consumer and no more protection.
