Due Diligence Framework
How to Select the
Right Advisors
The SMSF property industry has no shortage of "advisors" willing to help you, but not all of them are working in your best interest. Some are paid by developers to recommend specific properties. Others use templated advice that ignores your actual circumstances. And many have little to no SMSF experience and are simply riding the gravy train.
Before you sign anything or accept advice from anyone, you need to know exactly what questions to ask, what red flags to watch for, and how to verify that the person sitting across from you is actually qualified and legally obligated to put your interests first.
This section gives you a simple audit framework to use with every advisor you encounter.
How to Interview Any Advisor Before You Sign Anything
10 Questions to Audit Any SMSF or Property Advisor
You might've just read what happened with the Guardian—$1 billion wiped out, thousands of Australians devastated, and advisors who failed their basic duty to act in clients' best interests.
Now comes the critical question: how do you make sure you don't end up in the same position?
The answer isn't complicated. You ask the right questions, demand written answers, and walk away from anyone who hesitates.
Use this checklist with every advisor you speak to. Accountants, mortgage brokers, property consultants, financial planners.
Do you receive commissions from property developers, brokers, or referral partners?
Hidden commissions create conflicts of interest. If your advisor earns $6,000–$8,000 from a developer when you buy a specific property, their advice isn't independent, it's a sales pitch disguised as guidance.
A clear, written conflict of interest declaration: "We do not receive commissions from property sales, developer referrals, or broker arrangements."
- "We only work with trusted partners."
- "Our advice is independent." (without written confirmation)
- "We don't charge you anything." (means they're getting paid by someone else)
- Hesitation or vague answers about commissions
Demand written disclosure of all commissions and referral fees. If they won't provide it, walk away.
Are you licensed? What licenses do you hold, and what exactly are you authorised to do?
You need to know what services require licenses and who holds them. Not all advisors need an AFSL. Our model is designed to operate differently.
How to Verify Licensing and Credentials Properly
Don't take an advisor's word for it. Verify everything independently.
Step 1: Check ASIC's Professional Registers
Go to ASIC's Professional Registers
- Search by: Individual name (the advisor), Company name (the firm), License number (AFSL or credit license)
- Verify: License is current and active, Advisor is authorised to provide the services they're offering, No bans, suspensions, or enforcement actions
Step 2: Check for ASIC Enforcement Actions
Search for the advisor or firm name on ASIC's media releases: ASIC News Centre
- Look for: Court proceedings, Bans or license cancellations, Infringement notices or penalties
Step 3: Verify Statutory Declarations
Ask for a copy of their statutory declaration (signed and dated). Verify the signatory and the date it was signed.
What Licenses Actually Mean
| Service Type | License Requirement | What This Means |
|---|---|---|
| SMSF Setup & Compliance | Statutory Declaration signed and authorised by regulatory body | Advisor confirms they follow compliance rules under penalty of perjury |
| Property Advisory (Buyers Agent) | Independent Buyers Agent Registration OR Partnership with licensed agent | Advisor sources properties based on your criteria, not their inventory |
| Mortgage/Lending Advice | Credit License OR Direct partnership with licensed broker | Advisor sources loans based on your needs, not lender relationships |
| Financial Planning Advice | AFSL (Australian Financial Services License) | Only required if giving personal financial product recommendations |
- "We're educators, not advisers" (while recommending specific investments)
- License number not displayed or doesn't match ASIC records
- Refusal to explain what they're licensed to do
- Pushing AFSL as the only valid credential
Ask them to explain their licensing structure clearly. If they can't, stop the conversation.
Can I see a complete written fee breakdown for all services upfront?
Transparent pricing is non-negotiable. If an advisor can't or won't itemise their fees upfront, they're either hiding costs or earning undisclosed commissions.
A written, itemised fee breakdown covering:
- SMSF setup costs
- Annual compliance and administration fees
- Property advisory fees
- LRBA structuring costs
- Any ongoing fees or retainers
Example of transparent pricing
- SMSF Establishment: $2,700 (one-time)
Trust deed preparation: $800 • ASIC company registration: $576 • ABN/TFN registration: $200 • Rollover assistance: $600 • Bank account setup: $524 - Annual Tax Compliance: $2,300
Financial statements: $600 • Tax return lodgment: $700 • Annual audit: $400 • ASIC annual review fee: $310 • Compliance review: $290
- "We'll discuss pricing later."
- "It depends on your situation." (without providing a range)
- "Our pricing is competitive." (with no actual numbers)
- Fees hidden in lengthy documents
If they won't provide written pricing before your first consultation, they're not transparent. Move on.
Do I get a cooling-off period before any payment is due?
Legitimate advisors never rush you. High-pressure tactics like "limited spots," "offer expires Friday," "other buyers are interested," are classic signs of property spruikers and scammers.
- Minimum 5-day cooling-off period after receiving advice and before making any payment
- Written confirmation that you can review everything with your partner, lawyer, or accountant before proceeding
- No pressure to sign on the day
- "We need your deposit this week."
- "This property won't last, decide today."
- "Other clients are interested, so we need an answer now."
- Pressure to sign documents electronically during phone calls
Walk away immediately. Good opportunities don't disappear in 48 hours. If the advisor creates urgency, they're selling, not advising.
Can I have this advice reviewed by my own lawyer or accountant before signing?
If an advisor discourages independent verification, they're controlling the information flow. That's a major red flag.
- Explicit encouragement to get a second opinion
- "Absolutely, have your lawyer or accountant review everything."
- No resistance to external audits of their advice
- "You don't need an independent valuation, we've already had it valued."
- "Our conveyancer is included in the package, no need to get your own."
- "There's no point getting a second opinion, this is the market standard."
If they resist independent verification, they're hiding something. Stop the process.
What happens if I want to stop or exit halfway through?
You need to know your exit options before you start. If an advisor can't clearly explain how to exit, you're locked into something you might regret.
- Clear exit terms in the service agreement
- Refund policy if you decide not to proceed after initial advice
- No penalties for changing your mind during cooling-off periods
- Vague or non-existent exit terms
- "You'll lose your deposit if you change your mind."
- "We don't offer refunds."
Ensure exit terms are documented in writing before you proceed.
Who will I be dealing with day-to-day?
Many firms use sales reps or account managers as gatekeepers. You want direct access to the licensed advisor responsible for your advice, not a middleman.
- Direct access to your SMSF specialist, property advisor, and mortgage broker
- SMS and phone access to the actual advisor, not a call center
- One main point of contact who coordinates your team
- "You'll be assigned an account manager."
- "All communication goes through our client services team."
- "Your advisor will contact you when needed."
Confirm who you'll be working with directly, and get their contact details upfront.
Do you have professional indemnity insurance?
If an advisor gives you bad advice that costs you money, professional indemnity insurance ensures you have recourse. Unlicensed or dodgy operators often don't carry it.
- Confirmation that they hold professional indemnity insurance
- Coverage amount (typically $1M–$20M depending on firm size)
- Written proof if requested
- "We don't need insurance."
- Hesitation or refusal to confirm coverage
Only work with licensed advisors who carry professional indemnity insurance.
What's your process for ensuring SMSF compliance?
The ATO holds YOU accountable for compliance breaches, not your advisor. You need to know exactly how they ensure your SMSF stays compliant with sole purpose tests, related party restrictions, and arms-length terms.
- Annual compliance audits by an independent auditor
- Plain-English compliance checklists
- Regular trustee meetings and documented minutes
- Clear processes for ATO lodgments and record-keeping
- "Don't worry, we handle all that."
- No mention of independent audits
- Vague explanations of compliance processes
Ensure they can clearly explain how compliance is managed and who's responsible for what.
Can you provide client references or testimonials from advisors you work with?
While testimonials can be manipulated, speaking to actual clients who've completed the SMSF and property process can give you insight into how the advisor operates.
- References from clients who've completed SMSF setups and property purchases
- Testimonials that speak to transparency, responsiveness, and outcomes
- Willingness to connect you with past clients
- "We can't share client details due to privacy."
- No testimonials or proof of past work
- Only generic marketing reviews
Ask for references. If they can't provide any, proceed with caution.
Use This Checklist to Audit MALEX Too
We welcome the scrutiny.
Ask us every single question on this list. Demand written disclosure. Verify our licenses. Get a second opinion from your lawyer or accountant.
We won't be offended. We'll be impressed.
Because that's exactly what a responsible trustee should do.
The advisors who fail you are the ones who don't want you asking questions.
The advisors who protect you are the ones who insist you do.