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Bank preparing for ban on LRBAs
One of Australia’s largest banks has revealed that it has already commenced planning for legislative changes to SMSF borrowing.
St George Bank’s general manager of mortgage broking Clive Kirkpatrick has warned practitioners to be aware of potential changes to SMSF borrowing following the Financial System Inquiry’s recommendation to ban LRBAs.
“You have to optimise your business while the opportunity is in front of you but you have also got to be aware of how things will change around you and how they will impact your business,” Mr Kirkpatrick told SMSF Adviser’s sister publication Mortgage Business.
“That is what we are thinking about in terms of self-managed super,” he said. “It is in our mind as if they do make the change,” he said.
“It depends what the government will accept, what level of change. They may not scrap it completely; it may just be restricted to commercial property."
In the meantime, St George has streamlined the SMSF lending process for mortgage brokers in a bid to boost business before any changes are made.
As reported in SMSF Adviser late last week, this week new system enhancements came into effect for the lender’s SMSF products, including the removal of a financial advice certificate requirement.
“That was brought about through changes with FOFA,” Mr Kirkpatrick said. “We removed that necessity as part of these changes.”
Removing the one protection that was in place to ensure clients have had advice is NOT a good idea. This will just open the doors to the property spruikers to push more people through the door. I believe in SMSF's (I have one) and am a broker in this space and I don't think this is a good idea at all.0- Considering St george have the worst SMSF lending set up anyway... it is good that they are doing something!0
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