Properties & Pathways

Here’s why your financial planner doesn’t like real estate


14 June, 2022

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Ever told your financial planner you’re considering investing in property only to hear you should stick with stocks?

Maybe it was a property syndicator offering 7 per cent returns or a corner block in a gentrifying area. Their response might’ve been It’s too risky or You need to maintain it and deal with tenant complaints or There’s this wealth fund I want to chat about.

Actually, have you realised your financial planner rarely recommends property as an investment avenue? Strange, huh?

Property has helped countless of Australians prosper. We’ve seen it provide stable passive income in the form of commercial real estate and exceptional capital appreciation from strategic residential property investment. Yet some investors will be turned off the thought of investing in property because, well… their planner told them not to.

Why your financial planner doesn’t like real estate

The reason for your financial planner’s gripe with real estate is because there’s no money in it for them.

When you invest in shares, a mutual fund or an annuity, your planner will likely receive an incentive. Similarly, when you set up a self-managed super fund, your financial planner is paid thousands of dollars for the service.

But when it comes to you buying a property – whether on your own or with an unlisted property trust – there’s no incentive for them. No commission. That’s why they might be quick to pop your real estate bubble and suggest you build wealth via other means.

financial planners recommend real estate

We certainly know this doesn’t apply to every financial planner. Most are of course looking out for their clients’ best interests and real estate does not necessarily suit everyone’s financial situation. So, we’re going for the most balanced view possible here.

But for you to make the most balanced decision means knowing what you’re in for when you approach your fin planner for advice.

If you don’t feel like the reasons your financial adviser has given you about avoiding real estate, then you might consider asking how they are paid. If commission-only, there’s perhaps a reason why they hold a grudge against real estate – because your property investment doesn’t pay them a dime.

How a property syndicate can help

Investing in a property syndicate can be a reliable way to build wealth. Your capital is placed with experienced real estate professionals and invested alongside other sophisticated investors in smartly-purchased commercial and residential properties.

Properties & Pathways invests alongside every investor in high-quality commercial property investments. But while we provide a set-and-forget investment for our investors, we are proactive throughout the entire investment journey – from an intensive due diligence phase to making a calculated decision on when to divest the asset.

commercial property investors 2021

The strategy works. We’ve provided our investors a 24.4% p.a. average annualised return on our completed syndicates. You can tell that to your financial planner.

Or just show them our Financial Advisers Centre. Everything they need to know about how one of our property investments can build lasting wealth for you is under one roof. Not to mention testimonials from existing clients and our track record of successful property investment.

Financial planners are experts in wealth, not in real estate. Next time your financial planner tells you to look the other way when a seemingly good real estate investment opportunity comes along, make sure they’re advising you for the right reasons.

Because while every investment comes with risk – and the onus is on you to accept and understand that risk – real estate might be the secure investment vehicle you need for a healthy, wealthy retirement.

For more information on our property investments, get in touch with our Director (Investor Relations) Guy Doggett. Email, call or book a meeting with him today.

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Past performance is not indicative of future returns. Any information provided on this website has not considered the objectives, financial situation or needs of any investor; investors should consider whether it is appropriate to them to partake in a commercial property investment prior to investing, in light of their objectives, financial situation or needs. Every investor should obtain and consider the investment’s Information Memorandum before making a decision in relation to the investment.