So... Surprise! All year, I've been working with a group of Personal Finance advocates to close down a lot of unethical business.
Like. A lot. A LOT of unethical business and advertising.
Here's why and what's coming up.
Unethical Advertising and Consulting and The Lemon Law Video
Some of you may have noticed that Money Maverick has been producing video content as well. One of my videos - with no call to action on my part whatsoever - is tentatively titled 'Lemon Law'. It will be released in the next couple of weeks. It is a warning to the consumer NOT to purchase Financial products that you see on 3rd party advertisements.
A 3rd party advertisement is usually a blind ad from a page that is only designed to toss out advertisements. You rarely often ever know who the consultant is, or whether or not the person even has a license, which company they are from, and most importantly - whether or not the deliverables have serious negative financial implications.
Most of these ads are designed to prey on your greed, especially for very young or very old people.
Take for example, this outrageous nonsense. There is no Compliance or MAS check in the world that would ever approve this advertising.
I have 44 more like it and counting, saved in a folder right now that a "Group" will be sending over to MAS before I've finished publishing this.
It takes very little experience as a long-time serving consultant to tell you exactly what product this is, which company its from, and which firm is more likely to try to sell things in such a manner.
This is why several 'Campers' in the Personal Finance community have gotten sick and tired of these fairly unethical advertisements as well - forming a 'Group' and reaching out to me for help on eliminating research time on this, likely because I have spent a lot of my year highlighting such disgusting tactics as well. My role in helping them the last year has been: 1) To vet through and potentially identify/limit the sources of where these ads could be coming from.
I've long suspected that a ton of digital marketing agencies are either going along with this or worse, potentially responsible for the rapid increase in both intensity (the outrageous way they prospect) and frequency. So far the group has dilligently reported a lot of these ads (with some of the ad owners even ending up on the MAS Investor Alert list and other consultants suspended or warned), but they lack the speed and expertise of the market - which I offer them whenever I have time to look through their compilation of ads that are broadcasted to them every day.
I get some too, likely being in the target market - particularly on FB and Instagram. Consulting them for this helps saves them a tremendous amount of time before they can send a strong, due-dilligent report to MAS.
2) What product it is likely meant to represent and where the various exaggerations and misrepresentations arise from:
For the ad above, I could easily tell you which company its from based on the specifics of the product. This can be confirmed by doing some due dilligence into products in the market that meet the above criteria in entry (meaning that you can actually get a product like this). But the returns are usually either inflated, taken off a very specific or unrealistic period of time, or its a single fund outlier.
All of these things have a short track record and don't have the sustainability for the kind of promises that are being made, which means your expectations would likely be crushed - but not before you lost a tremendous amount of money or were stuck with a ridiculous commitment.
I would advise people who have already fallen into this to drop me a message for damage control, as well as how to write a detailed report to MAS. To be clear, there is absolutely nothing wrong with advertising your product. But having been under the thumb of regulation for a long time now, several things are important 1) The product should be clear and transparent
2) The company, the agent (name) and RNF Code (the license to sell) should be clear and transparent 3) Pseudonyms are acceptable only if the above 2 are easily found upon further digging into the page. Unfortunately, this is rarely ever the case and you get a lot of ads like this
4) Ads should be generic and not suggest any form or promise on unrealistic returns, using words like 'get' or 'receive' when it comes to high returns.
This is different from ILLUSTRATING a high return track record, which you'll notice that Money Maverick has done for years without suggesting in the slightest that you'll have the same result.
The video will be out next month, so hope that will shed better light. But honestly - feel free to share this post around and warn your clients off unscrupulous deals online. If a person can't be transparent about their license or company, they can't be transparent about anything they offer you.
If some of you would like more active involvement to help me with this, or active involvement in updates of who/what to beware of, you can always drop me a message - especially if you've already made financial decisions that you may already be regretting.
Personal Update - I'm Actually Resting!
IFPAS has been working really hard to ensure that our industry can be self-regulatory, rather than having to constantly deal with MAS. This is why it is so important for consultants to be self-regulatory and speak truth to power about what is a good and not good practice. If you're a consultant and haven't engaged in such things, you never had anything to worry about to begin with. The elimination of such practices will also increase your business as a consultant.
If you're a consumer or consultant who has already engaged, do stay cautious and refrain from doing so in future. There is absolutely no acceptable reason for a page not to reveal their name or RNF code for transparency. (I am aware my RNF code may not be on my blog but its very Google-able from my transparent page).
It's actually a call for help: Helping this "Group", while satisfying, has been quite emotionally exhausting on me. You'd be surprised how draining it can be. In any case, that's why I'm on leave for almost 8 days! So I'm publishing this from my serviced apartment, which is SG Clean etc.
I am still available for business appointments after the 19th, and there will still be a new article next week that I've written in advance, so look forward to it.
It's a doozy.