The PIPA Board has set an interim standard for its members and will consult on a formal policy. This is the reasoning behind it, and what it means for consumers of property investment advice.
Marketing that guarantees capital growth, guarantees a future property value, or offers to refund fees if a property does not reach a nominated figure has appeared across the property investment sector. The Property Investment Professionals of Australia has been asked about the practice by its own members. The Board has now taken a position on it.
In short
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PIPA members should not advertise or offer a guaranteed level of capital growth or a guaranteed future property value.
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The prohibition extends to fee refund and compensation arrangements triggered by a property failing to reach a specified value or rate of growth.
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A draft policy will go to members for consultation before the Board settles its final position.
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The interim standard applies from the 18th of August 2026.
The position
The Board has resolved to develop a formal PIPA policy on the use of performance guarantees and similar claims in property investment advertising. An interim standard applies to members while that work is completed.
The interim standard
Members should not advertise or offer a guaranteed level of capital growth, or a guaranteed future property value. This includes any arrangement that promises to refund fees, or otherwise compensate a client, if a property does not reach a specified value or rate of growth by a specified time.
Members have also been asked to apply careful judgement to guaranteed rental yield claims, to forecasts of future performance presented as reliable outcomes, to statements that an investment is risk free or protected or certain to outperform a benchmark, to buy back arrangements linked to investment performance, and to historical performance claims that cannot be objectively substantiated on request.
What a performance guarantee is
A performance guarantee attaches a promise to a forecast. The adviser states that a property will grow by a nominated percentage, or reach a nominated value, within a nominated period. Where the property does not, the business undertakes to refund its fee, to compensate the client for the shortfall, or in some structures to acquire the property. The commercial appeal is obvious. The client is invited to read the guarantee as evidence that the forecast is sound, and to treat the decision as carrying less risk than it does.
The effect on the client’s risk
A guarantee of this kind does not reduce the risk in the underlying asset. Property values move with credit conditions, supply, employment, migration, planning decisions and interest rates, none of which is within the control of the business offering the guarantee. What the guarantee does is transfer part of that risk from the client to the balance sheet of the adviser.
That transfer holds only for as long as the adviser remains solvent. A guarantee triggered by a broad decline in values will be triggered across the whole client book at once, at the point when the business is already under revenue pressure. Recent failures in the sector, which have attracted considerable public and media attention, illustrate what an unsecured promise is worth when the business that made it enters administration.
A guarantee does not remove the risk from the client. It transfers that risk to the balance sheet of the business making the promise, and it holds only for as long as that business is solvent.
PIPA Board, the 18th of August 2026
The legal position
The Board’s concern is a professional standards concern first. There is also a legal dimension that members and consumers should understand.
Under section 4 of the Australian Consumer Law, a representation about a future matter is taken to be misleading unless the person who made it had reasonable grounds for making it, and the evidentiary burden falls on the person who made the representation rather than on the client who relied on it. A person who guarantees what a property will be worth in five years is making a representation about a future matter over which they hold no control, and will be required to demonstrate the grounds on which they made it.
The Board is not suggesting that any business currently using these approaches has breached the law. Characterisation depends on the structure of the particular arrangement, which is a matter for specialist legal advice. The Board’s point is narrower: the risk is real, it is not widely understood in the sector, and it falls on consumers before it falls on anyone else.
Why the association is acting now
Property investment advice sits outside any licensing regime in Australia. A person may hold themselves out as a property investment adviser without qualification, supervision or professional indemnity cover. PIPA was established by practitioners for that reason, and has argued since its formation that the sector belongs inside a regulatory framework.
Where an industry is unregulated, a voluntary standards body has one practical instrument, which is to set the standard clearly and early, and to hold its members to it. Waiting for a regulator to act, or for a court to determine the question after a consumer has been harmed, would leave PIPA responding to a failure rather than working to prevent one. The Board has taken the view that the standard should be set now.
What consumers should ask
Consumers considering an offer that includes a guarantee of future property performance may find the following questions useful.
- What happens to this guarantee if the business is no longer trading when the promise falls due.
- Is the guarantee backed by anything beyond the adviser’s own balance sheet, such as an insurance policy, a bank guarantee or funds held in trust.
- What are the conditions and exclusions, and what evidence will be required to make a claim.
- What are the grounds for the underlying forecast, and can they be produced in writing.
- Would this property be a sound purchase without the guarantee attached to it.
Next steps
A draft policy will be circulated to PIPA members for consultation before the Board determines its final position. Members who currently use this form of advertising have been asked to contact the PIPA office so that the material can be discussed with the Board in confidence.
PIPA will continue to advocate for property investment advice to be brought inside a regulatory framework, and will publish the final policy once member consultation is complete.
Cate Bakos
Chair, on behalf of the PIPA Board of Directors
Property Investment Professionals of Australia
