Investment seminars

Psst! Want to be a millionaire?

You've received an 'exclusive' invitation to attend a 'premier wealth event'. There will be motivational speakers. Their financial secrets have the power to turn you into a millionaire within a few years.
 
Sounds great but such claims are almost always over-hyped or misleading. The recommended investments can be expensive, highly risky and lose you money. Here are some warning signs to help you recognise dodgy investment seminars and avoid being ripped off.

Unlicensed speakers

Seminars often promise a motivational speaker who claims to be a self-made millionaire, and who will share their secrets to financial success.

One seminar featured 'Four of Australia's greatest financial superstars'. When ASIC checked them out, none of the presenters had an Australian Financial Services (AFS) licence. In fact, three of the four speakers were found to live and work in the USA. Who knows if they were 'financial superstars' or just slick salesmen?

Big promises equal big risks

Video: Getting rich through property investment

Animated video about property investment seminars

This animated video warns about investment property seminars and the persuasive tactics of dodgy investment gurus.

Transcript: Getting rich through property investment.

Here are some promises typically made by dodgy investment seminars:

  • Risk-free investments
  • Be a millionaire in a few years
  • Above average returns at little or no risk
  • Government-approved investments

Check out the claims

Look carefully at the strategies suggested by the seminar to achieve these results. Shares typically return around 10% a year, year after year, and property about 6%, depending on the location. If you're offered returns of 1-2% more than these typical returns, get a second opinion and ask for a detailed written explanation.

Property deals offered at these seminars might include 'rent guarantees' or 'discounts' for buying off the plan. They can involve hidden fees and commissions. The properties can also be over-valued.

Other seminars promote schemes that involve you lending money with little or no security. Another twist is to get you to invest in offshore schemes where you lose the protection of Australian laws. You may never see your money again.

High fees

Seminars often don't deliver any concrete investment opportunities. The first event may be free. When you attend you will be pressured to buy reports or books and 'sign up' for more expensive seminars or educational courses. The only person making any money will be the seminar organiser through the fees you pay.

Get independent advice before you invest

Check that it's legal

Check ASIC Connect and search within 'banned and disqualified' or the ACCC's Undertakings Register to see if they have taken any action against the promoters. It is also worth checking whether your state or territory consumer affairs agency has taken any action against them. Even if the seminar providers appear to have a clean slate, that doesn't mean the scheme is safe or legal.

Get financial advice from someone not linked to the seminar

If you attend a seminar, never make any decisions about money or investments on the spot. Always give yourself time to consider things calmly and seek independent financial advice. The atmosphere at these events can be quite exciting but not the right environment for making rational decisions.

If you want to attend seminars, consider reputable providers like the Australian Securities Exchange and Department of Human Service's Financial Information Service.

If you change your mind

If the promotional material does not clearly state that further training or other services will be sold at the seminar, under the Australian Consumer Law you have 10 business days to change your mind if you sign up. 

This applies if, for example, you agree to join an investment club or enrol in a training course after being cold-called by a property spruiker.

If the seller doesn't tell you about this cooling-off period, you are entitled to a longer cooling-off period.  To find out more, including details for relevant state and territory agencies, visit the Australian Consumer Law website.

Report suspicious activities

If you've been invited to a seminar that doesn't seem right or if you're worried you have invested in a scam you should report the scam. Also warn family and friends so they don't fall for the same deal.

The promises made by some investment seminars sound enticing, but the reality often doesn't stack up. Always watch out for claims that sound too good to be true and make sure you get independent advice before you invest.


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Last updated: 22 Jun 2016