A recent ASX research paper has found Australians are ditching shares in favour of property. Direct share ownership has dropped from 44 per cent to 33 per cent, while indirect share ownership (such as those found in managed funds) has plummeted from 32 per cent to 10 per cent.

The results are not surprising.

First, no matter how bad a property market gets a house won’t simply disappear – as it does with shares. Every financial crash sees some companies simply go to the wall, with their investors losing everything.

Property crashes, in contrast, may have homeowners selling for a loss – but they’ll at least come out with something.

Second, real estate agents and lenders are answerable for the actions they perform, while financial advisers are not.

David Murray’s Financial Systems Inquiry and an Australian Securities and Investment Commission investigation has uncovered a financial industry rife with egregious, self-aggrandising, callous, money-hungry liars – willing to do and say anything for their own gain.

The Financial Planning Industry has obstructed the FSI investigation and fought against proposed ASIC reforms every step of the way. And furthermore, they have a long history of such shady-dealings – with both public and investigative bodies.

Third, people involved with the property industry have some skin in the game. Financial advisers get their money from you the investor or through surreptitious kickbacks from the portfolios they recommend to investors – they very often don’t even have shares in the stock they recommend. So if the price of one of their recommendations falls it doesn’t affect them in the least.

Again in contrast, those involved in the property market rely on return trade. Real estate is a highly competitive industry with shysters being quickly identified, booted, and (more often than not) prosecuted with the full force of a governing body that guards its reputation seriously.

That’s not to say those in the property industry are paragons of virtue – far from it. Recent articles about developers using sunset clauses to benefit from rising house prices (at the expense of owners) and unlicensed realtors selling the same property multiple times do exist. But these people have as much to fear from their own enraged governing body as they do from the consumers upon whom they prey; while, by all accounts, the financial advisers of Australia are protected by their thieves-guild of a governing body.

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