Beware of fake financial advice websites

Yesterday the Australian regulator ASIC advised they have taken action to close down some fake financial advice websites as well as closing the companies behind them.

Fakers tend to try to make themselves look as legitimate as possible so as to trick the unsuspecting user.

For example one of the websites ASIC closed down quoted a fake Australian Financial Services Licence (AFSL) number.

Just because someone quotes a registration number that looks authentic don’t assume it is real. With companies and financial services you can search the ASIC register by number to confirm who really is registered with that number. I strongly recommend that you do that.

For example you can search the ASIC AFSL Authorised Representatives register for the number 238821 and you will find me, Matt Hern. (and discover my middle name.)

In their media release ASIC provide the following six point checklist for consumers who are contemplating using services from websites:

  • Is the company a registered Australian company? (Check ASIC’s register)
  • Does the firm hold an Australian financial services licence or authorised representative status? (check ASIC’s AFS licensees register)
  • Does the firm’s licence conditions specifically authorise them to operate managed discretionary account services (MDAs)? This licence authorises the licensee to carry on a financial services business; to provide financial product advice for MDA services; to deal in a financial product by issuing, applying for, acquiring, varying or disposing of a financial product in respect of MDA services; and to deal in a financial product by applying for, acquiring, varying or disposing of a financial product on behalf of another person in respect of MDA services
  • Have you received a Financial Services Guide (FSG)?
  • Have you received a Statement of Advice and an Investment Program?
  • Does the firm have professional indemnity insurance?

(I am not sure how you check the professional indemnity insurance beside asking for a copy of the certificate.)