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Avoiding the Wealth Creation Con Artists

Many people in their 50s and older are recognising they are getting closer to retirement age, and may not have enough superannuation to get them through their later years. And it’s no surprise that wealth creation experts are popping up everywhere to help, offering books, seminars and investment options! Some of these experts offer sound advice, others promote risky strategies, and in some cases, others are con artists selling dodgy wealth creation schemes.

While some investment scams are obvious, others are not so much. Con artists may not necessarily look like the Artful Dodger or the super smooth talking scammer you might see on a TV show or film. In some cases, they may be trusted members of the community.

So, how do you tell the difference between a con, and a sound financial expert who will provide you with good advice? Read on for some tips.

Types of Investment Scams

There are numerous types of money scams, some of which include:

• False self-managed super funds (SMSFs) – often involving large commissions for moving your super to a possibly fake SMSF.
• Online stockbroking scams – which can lead to loss of money and identity theft.
• Tax scams – promise of tax refunds that don’t have anything to do with the tax office!
• Property schemes – that promise enormous returns for little effort.

What To Watch Out For

When it comes to investing, there are no quick fixes or magic answers, and all investment involves some level of risk. But there are certain things to be vigilant about, including:

• Fantastical claims that promise quick and guaranteed returns for minimum risk.
• Persistence and pushiness – for instance if you are being pushed to switch from your current investment to theirs with outlandish promises, or to be quick about making a decision or you will ‘miss out’.
• Slick websites that show constantly outstanding returns way over and above their peers.
• Cases where a junior staff member calls you and then passes you onto someone more senior when you show interest.

Think about it – if it was as easy as the person promising you streets of gold says, why are they sitting in an office talking to you?

Wealth Cons

Questions and Research

Of course not all investment schemes are scams and there are plenty of legitimate financial experts out there.

Before you hand over details or any money, it pays to ask a few pertinent questions, such as the name of the individual or company and their address, as well as their Australian Financial Services Licence number.

If they don’t provide you with an AFS number and you suspect a scam, you can report them to ASIC. If they do, you can check their number through ASIC’s professional registers. You can also use the register to check out details of companies.

In general, just be sure to do plenty of research before handing over your hard-earned money or your personal details, by checking out the credentials of the individual or company, carefully assessing the claims they are making, and taking your time about it all.

It also pays to talk to qualified and licensed chartered accountants or a self-managed super accountant for assistance with investments, retirement planning and superannuation, to help you secure the right types of investment according to your risk profile, the current market and your particular financial goals.