ASIC to pressure ‘get-rich-quick’ schemes
TheAustralian Securities and Investments Commission‘get-rich-quick’ schemes when it releases findings from an industry surveillance investigation later in the year.
Responding to Reserve Bank governor Ian Macfarlane’s comments calling for a crackdown on get-rich-quick seminars run by real estate agents, ASIC revealed it is working with state Governments to ensure schemes are properly policed, even though these agents are outside its jurisdiction, as they do not fall under the Financial Services Reform Act (FSRA).
“ASIC has strong concerns as to the range of get-rich-quick seminars being promoted. Many of these seminars relate to real estate investments and often involve high risk strategies that aren’t fully explained to investors,” ASIC executive director consumer protection Peter Kell says.
Kell says the state Governments, the underlying regulators of real estate agents, have shown a great deal of interest in the matter.
“High risk strategies are often pushed without an explanation as to the dangers inherent of such investing, and there is a lack of information provided to consumers as to the pros and cons of getting into such schemes,” Kell says.
There has been concern among the financial planning industry about the fact that such high risk real estate ventures do not fall within ASIC’s jurisdiction, given there is no requirement for them to be licensed under FSRA, Kell says.
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