Unlicensed financial advice by real estate agents to tenants
ASIC is advising tenants who may have received unlicensed from real estate agents to report misconduct to ASIC.
ASIC is aware that some real estate agents are advising tenants who are unable to pay their rent, or who may find themselves in such a situation in future, to consider applying for early release of their superannuation. Recent media reports and social media commentary outlining this conduct by some real estate agents is of significant concern to ASIC.
As part of the Federal Government’s COVID-19 economic response package, the Australian Tax Office (ATO) has announced it will implement a measure to allow individuals affected by COVID-19 to access their superannuation early, with up to $10,000 in 2019-2020 and a further $10,000 in 2020-2021. ASIC is concerned that the conduct by real estate agents referred to above may:
- constitute unlicensed financial advice in contravention of section 911A of the Corporations Act
- not be in the best interests of individuals in contravention of section 961B of the Corporations Act.
Financial advice must only be provided by qualified and licensed financial advisers, or financial counsellors, not by real estate agents who neither hold the requisite licence, nor are an authorised representative of an Australian Financial Services Licensee.
The Corporations Act imposes significant penalties for a contravention of section 911A. For individuals this can be a maximum of 5 years imprisonment, and/or a fine of up to $126,000 (600 penalty units), and for corporations a fine of up to $1,260 million dollars (6000 penalty units).
ASIC is advising consumers experiencing financial difficulty to visit Moneysmart and review their options. We are also advising tenants who may have received unlicensed advice from real estate agents to report miscondut to ASIC.
ASIC is Australia’s corporate, markets and financial services regulator.