There is an old saying that “if it sounds too good to be true, it probably is…” I smell a rat that came in the form of an unsolicited email offering that I received today. The subject line contained the following: A generous commission structure for financial advisors (this alone should set the warning bells ringing!).
Then the rest of the email…
Early birds catch the fattest worms…and it is the same with investments!
Brokers stake your claim and offer your clients a pre-tax return of 18.5%! Be the early bird for your clients, with a pre-tax return of 18.5% which interprets into a yearly tax-free dividend of 12% for an investment term of three years… (not sure that the maths works on this one!)
Offer your clients a share of GoLife’s limited preferential share issue! GoLife, a pharmaceutical company that distributes a range of natural health products, has issued a limited number of preferential shares to the public to the value of R40-million. Their share issue offers an above-average fixed dividend of 12% after tax, payable monthly for a period of three years. On top of this, you get your full investment back at the end of the three-year period.
At least 3 flashing lights should be going off by now:
- Higher than average returns
- Attractive commissions
- The email refers to the company being approved by the Registrar as well as to a prospectus on the website…there is no prospectus (yet) and which Registrar is it? The Financial Services Board has no knowledge of this company at all…
- Pharmaceutical company – ok maybe that’s a bit unfair but wasn’t the Tannenbaum Ponzi Scheme based on a pharmaceutical scam?
Maybe I am being unfair and maybe this time it’s different, but whatever you do, make sure you investigate this properly before you part with any of your hard earned cash.
You have been warned…
