PIPA Member Profile | Margaret Lomas, Destiny Financial Solutions
Jun 2024Karen Millers
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PIPA Member Profile | Margaret Lomas, Destiny Financial Solutions
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Margaret Lomas is a stalwart of the property investment sector as well as one of the founding members of PIPA. She looks back on how the industry and the association have changed over the years.
| | YOU ARE A FOUNDING MEMBER OF PIPA. PLEASE DESCRIBE HOW AND WHY THE ASSOCIATION WAS FORMED ALL THOSE YEARS AGO. |
| The association was formed by a small group of property investment advisers who were concerned at the lack of regulation in the industry and the large number of spruikers taking advantage of uneducated consumers. Our mission was twofold – to lobby the government to bring in regulation, and to develop a course to educate advisers and a code of conduct under which they could then operate until regulation evolved. We have been highly successful in our second goal, but sadly, after more visits to Canberra than I can count, and some serious lobbying, the government remains steadfastly deaf to the serious issues that having no regulation raises. Our board back then numbered just four people, each of whom donated significant time and personal funds to the association. Many hours and late nights were expended in getting the association to where it is today. |
| | WHAT CHANGES HAVE YOU SEEN IN THE PROPERTY INVESTMENT SECTOR OVER THAT TIME? |
| Firstly, there are ten times as many players in the industry, and sadly this means ten times as much risk to the consumer, as without that much-needed regulation, a property adviser has no obligation to be educated, regulated or to operate under any kind of rule or law. You can literally be unemployed one day and a fully-fledged “property investment adviser” the next and operate any way you like. Most property investors are unaware of this, and mistakenly Believe that anyone calling themselves an “adviser” must be governed in some way. When a consumer is then left out of pocket, sometimes significantly, as a result of poor advice or just plain dishonest practice, there is virtually no recourse for them. In the 25 years I have been advising, the changes have been vast. This includes the development of so many different ways to invest in property, as well as the advent of a lot of clever strategies and schemes. In my opinion, most of those are designed to benefit the person who created it first, and it is because of these schemes that many property investors find themselves far worse off than they were before they decided to invest in property. |
| | LIKEWISE, HOW HAS PIPA EVOLVED OVER THE SAME PERIOD OF TIME? |
| PIPA has remained true to its original intentions – which is to simply educate consumers so that they can avoid the pitfalls of investing in property and create standards and accreditation so that anyone dealing with its members can at least know that there is someone watching the shop. While PIPA can never guarantee that a consumer using the services of one of its members will have great success – since there is a limit to how deeply we can investigate potential members – at least if something does go wrong, we can advocate on that consumer’s behalf, often facilitating a suitable resolution. PIPA has also now become more active in assisting its members with building their businesses, through the regular seminar offering as well as network events at which some additional education is always provided. We look at both the property advising side of things, and the business development aspect, so that our members are operating as effectively and ethically as possible. |
| | WHAT ARE SOME OF THE HIGHLIGHTS DURING YOUR INVOLVEMENT WITH THE ASSOCIATION? |
| The first highlight was getting the association to the point where it was actually supporting itself without the need for those original members to be funding the operation. To achieve that our membership drive was always in overdrive, as the four board members networked, lobbied, and walked the halls of every property show in every town to drum up support and new members. At that time, we also hired our first part-time staff member, which removed some of the administrative burden from the shoulders of those board members. I think few people realise just how much work, money and resources were provided by the original four – we all donated staff hours, personal hours and significant funds for several years. Becoming self-sufficient was not only an achievement, but a welcome relief! For me, the other highlight was finally getting the association to the point where it had a decent-sized board of really well qualified and clever people, from many different areas of property investing. At that time, I was finally able to hand on the chair role (which I had enjoyed, but probably had been in a little too long to remain effective) to someone else who had new ideas and fresh energy. It’s nice to believe that you are an important part of a team, but it is critical to realise that you aren’t indispensable, and that new blood can often bring wonderful new ideas and direction. On the day that I handed over that role, I knew it was the right thing for the association, as I had done as much as I could. Many times, during board meetings, I cast my eye over the people present and reminisce on the times when we were four people, from three states, meeting in a little bar somewhere. We have certainly come a long way! |
| | PIPA’S MAIN GOAL HAS ALWAYS BEEN TO SECURE REGULATION FOR THE PROPERTY INVESTMENT ADVICE SECTOR. WHAT HAVE BEEN SOME OF THE HURDLES ALONG THE WAY, AND WHAT ARE SOME OF THE OPPORTUNITIES THE ASSOCIATION CAN NOW LEVERAGE? |
| The main hurdle is always change of government. We start with the opposition usually, who love to have something to champion. Just as we get what seems like a firm commitment for the issue of regulation to be dealt with, that party wins office and They never speak to us again, until they are back in opposition. I have visited three senators, had questions asked in the senate estimates committee more times than I can count and have had absolute commitment that regulation would be looked at so many times that I have now become an absolute cynic about the motivation of all politicians. While it suits them to have a cause, they’ll grab it. When the crunch comes, they do a complete about-face. At one stage we even had several meetings with treasury, coming up with a concrete plan on how regulation would be implemented. Boy, were we excited! Five months later, change of government and no one can even find the minutes of those meetings! When I present what has become pages of anecdotal evidence telling stories of property investors driven to the brink of bankruptcy by a property spruiker, most politicians are stunned, admitting they thought that regulation already existed. |
| | YOU HAVE BEEN A STALWART OF THE INDUSTRY FOR DECADES. WHAT ARE SOME OF THE ISSUES THAT REMAIN CONCERNING TO YOU AND WHAT CAN BE DONE ABOUT THEM? |
| I absolutely hate that a “property adviser” can give people advice on one hand, and then sell them a property on the other. It’s like telling people they have a problem they didn’t know they had but then magically providing the solution. I don’t like the fact that most property investors don’t even know how much money they are paying their adviser, because the fee is hidden as commissions on property. Usually that investor also pays more than the property is worth to fund that commission, starting way behind the eight-ball and ending up very disappointed with the property’s performance. And there is no regulation to stop this unethical behaviour! It concerns me that people say they have no time to become educated about how to invest in property. Then they hand over tens of thousands of dollars either knowingly, or via those commissions, to a Property adviser (who isn’t a PIPA member) to do the work for them. They are totally unaware that the adviser probably has a property ready to sell them, for which they do no work to establish if that property even suits the personal and financial needs of that individual Investor. Those investors think they’re getting advice, but in reality, it wouldn’t have mattered what their Financial circumstances or retirement goals were, that same property would have been recommended. I could go on for days and fill this whole magazine with things which concern me. |
| | FINALLY, WHAT ARE YOUR PLANS FOR THE YEARS AHEAD? |
| I think it’s time for me to retire and become a fiction writer, don’t you? |
Originally Published: PIPA Adviser Issue #17
