I'm aware of one particular case where a family with four investment properties was offered 680,000 (now worth 220,000) for one of their properties in 2007.The family responded to the offer by saying that they needed to seek the advice of their Accountant. Within one week they replied that the Accountant's advice was to retain the property "for their pension" and based on the fact that interest paid was fully allowable against rental income for tax purposes, "they would be mad to sell it" That family is now in London queuing up at the bankruptcy court.
Hi Tommy. I have no idea what discussions took place on AAM in 2007, but I'm not talking about AAM, I'm talking about Ireland's boom and bust.
Surely, any Solicitor that was handling the affairs of an amateur BTL'r had a duty of care to their clients, to express caution and to flag the downside of reckless investments.
Accountants are not usually consulted on buying the family home. In fact, I would say that they were rarely consulted on buying residential investment properties either. Accountants are not economists and I don't think that the following would be their area either: "money supply, interest rates, employment levels, building activity, house finishes and so forth. To a professional it should have been clear that we were treading un chartered waters and the potential downside should have been identified."Similarly, Accountants who were often employed to give advice on large financial decisions appear to have failed in many cases and were apparently oblivious to the basic cornerstones of good financial advice.
If we take your argument and agree that Solicitors and Accountants are NOT
competent Financial Advisors in this respect, then they should not take this type of work on.
If they do advise in this area (and I know they do) then they need to take professional responsibility for any advice imparted
Brendan
Both Lawyers and Accountants were and are widely approached for this type of advice all of the time.
If we take your argument and agree that Solicitors and Accountants are NOT
competent Financial Advisors in this respect, then they should not take this type of work on.
If they do advise in this area (and I know they do) then they need to take professional responsibility for any advice imparted
...................................................................................I can't speak for solicitors but accountants who provide financial investment advice are very tightly regulated in relation to the advice they impart. Most sole or SME practice accountants either don't offer investment advice at all or confine themselves to discussing generic investment issues (eg the merits or otherwise of tax-motivated pension investments) with clients.
One issue that has bothered me for quite some time, is the role that our professions and "professionals" played in Ireland's boom and bust.
.I would have to agree with Dr.Debt that the Professionals do not appear to have taken their fair share of the flack for the very poor, reckless and incompetent advice that many of them gave out during that time.
We're all smarter in hindsight, but what you have to deal with is what was known and what people believed at the time, not what we know now.
.
@ Jim, I'm not sure that any of us is any "smarter" in hindsight and that's not a valid explanation for being less smart or less professional in a boom.I would have to agree with Dr.Debt that the Professionals do not appear to have taken their fair share of the flack for the very poor, reckless and incompetent advice that many of them gave out during that time.
The way you view it is the same for me (and you're abroad too I think). Must have a read of that book you recommended.
In any case who on earth, with experience of buying many properties, asks an accountant whether it's a good idea to sell or not. If you're an investor in property, then you should know what you are doing without asking an accountant, it's not an accountants area of expertise? You may ask the accountant his opinion, you may ask him how it's beneficial from a tax planning point of view, but you ultimately make the decision to sell.
Brendan
Both Lawyers and Accountants were and are widely approached for this type of advice all of the time.
If we take your argument and agree that Solicitors and Accountants are NOT
competent Financial Advisors in this respect, then they should not take this type of work on.
If they do advise in this area (and I know they do) then they need to take professional responsibility for any advice imparted
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