FMA warns investors off property seminar ads

[muppet]

FMA warns investors off property seminar ads

Conor O'Brien | Friday October 28, 2011 | 11 comments

The Financial Markets Authority (FMA) has issued a warning to potential property investors.
Newspaper ads being run by Property Tutors Limited (PTL) invited people with “no or minimal income” to attend seminars where they will learn skills to obtain loans for the purpose of property investments.
The FMA issued a warning against the ads and says that people being targeted by PTL should seek legal and financial advice before having any dealings with the company.
FMA CEO Sean Hughes says investors needed to understand fully the costs of property ownership and debt servicing, market fluctuations, and the risk of losing assets used as security.
An FMA spokesperson says this is the first warning they have issued against the company.

http://www.nbr.co.nz/article/fma-warns-investors-property-seminar-ads-co-103353

[PropertyTutors]

PropertyTutors acknowledge advertising comments by the FMA

Property Tutors Limited provides property investment education; the Tutors are registered with the FMA (Financial Markets Authority) as either an Authorised Financial Advisor (AFA) or as a Registered Financial Advisor (RMA).

PropertyTutors Limited wishes to acknowledge the FMA warning in response to our recent newspaper advertising, and to inform you that we have taken steps to accommodate the FMA’s viewpoint in our marketing message.

PropertyTutors Limited does not offer loans or sell properties. Our recent advertising message was referring to property investors use of asset based loans; these loans are offered by independent mortgage brokers, not by Property Tutors Limited.

[DaveW]

Does offering property investment advice not fall under the new authorised financial adviser act?

[speights boy]

Which is why some people have become Registered FAs or Authorised FAs I guess, and others have "left the building"

[DaveW]

The PTL Directors are Registered Financial Advisers, so nothying to worry about right?

[PeterEmpowerEd]

The PTL Directors are Registered Financial Advisers, so nothying to worry about right?

Dave, there's a significant difference between being a 'Registered Financial Advisor' and an 'Authorised Financial Advisor' ... this is from the FMA site

All financial advisers must be registered on the Financial Service Providers Register (www.fspr.govt.nz). In addition, FMA licenses and monitors Authorised Financial Advisers and Qualifying Financial Entities. Only Authorised Financial Advisers and Qualifying Financial Entities can offer personalised advice on complex investment products.

Types of Advisers
Financial advisers are people who give advice about financial products. They include financial planners, brokers and people working for banks and building societies who provide advice about money and investing.

Advisers hold different types of licences and this affects the kind of advice they can provide. There are different types of financial advisers.

Registered Financial Advisers (RFAs)
Can advise on simpler products like insurance, bank term deposits, and mortgages.

Qualifying Financial Entity advisers (QFE advisers)
Can advise you on the same products as RFAs and investment products like KiwiSaver or managed funds. But they can only advise you on the investment products provided by their company.

Authorised Financial Advisers (AFAs)
Have met minimum qualification requirements and must comply with professional standards. They can advise on more complex investment products and can also offer investment management and investment planning services. Their licence will set out the types of products and services they are authorised to offer.

There's also a criminal and background check component ... e.g. people with fraud or other convictions etc will be subject to extra scrutiny. And there's also a 'good character' component ..

The Commission expects the following types of information to be disclosed by applicants and/or referees:

• information suggesting a lack of willingness to comply with legal obligations, regulatory requirements or professional standards;
• obstructive, misleading or untruthful dealings with others;
• a breach of fiduciary obligation or other obligation involving trust;
• a failure to deal appropriately with conflicts of interest;
• involvement in negligent, deceitful or otherwise discreditable business or professional practices;
• failure to manage business or personal debts or financial affairs satisfactorily.

- P

[donna]

As mentioned Property Tutors have the required FMA certifications while other Property Investment educators have left the industry and in some cases the country....Dean Letfus comes to mind.

Of course not all have bothered to do either and continue to operate - it will be interesting to see - for how long.

Cheers,

Donna

[DaveW]

Seeing they are registered FAs then yes Property Tutors are qualified to provide mortgage advice, as Peter high-lighted, along with education. But where on PTs website does it show the full AFA qualifiation required for providing investment strategy?

[TheLiberalLeft]

I'm still very keen to know where I, with no income, can borrow 6 figures to finance an IP. Sounds awesome! Almost too good to be true.

[speights boy]

TLL
Pop along to a seminar as your avatar, and I'm sure you'll be welcomed with open arms.

[DaveW]

TLL, have you found a good deal yet to take to your mortgage broker? You'll find some answers there.

[halfempty]

Always laugh when people comment about events they havent attended.Go along then slam them.

[TheLiberalLeft]

Did the FMA attend before issuing its warning? I wonder... If not, they should be ashamed of themselves. Reeks of "The Man" trying to stop the little guy moving ahead. All I, and my buddies huddling around the 44-gallon burning drum want is an IP with no money down.

And more social welfare, of course.

[halfempty]

FMA didnt have an issue with the event, they rightly had an issue with the wording in the marketing.

[TheLiberalLeft]

"The FMA issued a warning against the ads and says that people being targeted by PTL should seek legal and financial advice before having any dealings with the company "

Sounds like it may be a little more than just the advert. Unless you are suggesting that the amazing "no money needed loans" as advertised WOULDN'T be brought up at the seminar? In which case, I'd want my money/time back.