Interesting suggestion from the AFA that is worthy of a comment or two:

1. The cost of of obtaining advice will add to the cost of using a LRBA strategy, but that is often already the case as major lenders require a financial planners sign-off in any case. I wouldn't imagine too many planners are providing this sign-off free of charge;

2. The requirement to obtain advice will not provide protection from those planners who are the key drivers of using a LRBA within the SMSF environment. In fact, it will legitimise them;

3. Planners are often compromised when a referral source encourages trustees to go down the LRBA path and they are then pressured (by their referral source) to provide a certificate for the lender;

4. Accountants will no doubt justifiably argue that they should be also be included in the mix to provide advice before trustees enter LRBAs;

5. Somehow I suspect that there are very few trustees that enter LRBAs without being advised or influenced to do so by a real estate agent, mortgage broker, bank, financial planner, taxi driver, next door neighbour, accountant, or the media;

6. Good training material for advisers on LRBAs seems to be very limited. If anyone knows of really comprehensive training in the use and operation of LRBAs, I would love to hear.

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