How to check if a fund manager, financial adviser or broker is legitimate
Hi everyone, it’s come to my attention that investment scams are massively on the rise (thanks in part to AI & Facebook). But also, with the launch of Rask Invest - I’ve realised that far too few investors know how to independently verify they are dealing with a real, secure, genuine investment service or platform.
Hopefully, most of you know you check the Moneysmart financial adviser register when you need a one-on-one financial adviser. I laid out how to find a financial planner in Australia on our financial planning page.
But how about if you’re looking for more than a financial planner? Did you know ‘other’ finance businesses are NOT listed on moneysmart.gov.au?
For example, you’re wanting to invest with, say, a fund manager like Rask Invest? Or you want to check on a person calling themselves an “expert trader” or “market strategist” who appears on Instagram or Facebook (or the TV or radio!) - are they really being licenced and being supervised? Or perhaps you want to see if that guy selling timeshares in Cairns can back up his claim of being qualified to give financial advice?
Here’s how you check if a brokerage, fund manager or investment service is legitimate
Below is an extract of a recent conversation I had with an investor via Rask Invest, who was gearing and all set to invest with us.
Note that this investor had already listened to the podcasts for a long time, watched us on YouTube, read the PDS, TMD and Rask FSG, visited the websites, etc. So they were familiar with our content. They even jumped on a call with Mitchell Sneddon, our Head of Funds Management. So they’ve done everything right so far. But they are still concerned - and they SHOULD BE. Because it’s their retirement savings on the line.
I’ll use Rask Invest as the example in this regard but you should be able to repeat the steps for other services like brokers or ETF providers or general advice services (e.g. investment newsletters, websites, analysts, etc.).
“…it's our life savings and it's not easy to know these days how legitimate things are online. Is there any further checks we could do to make us more comfortable with making the deposit. Thanks.”
1. ASIC - go to asic.gov.au (Government website)
Professional Registers >> Enter Rask's licence number or authorised representative number (found in our FSG or in the PDS): 1280930
Then select "Australian Financial Services Authorised Representative" from the dropdown list (next to "In ; Select Register")
Here's the link:
https://connectonline.asic.gov.au/RegistrySearch/faces/landing/ProfessionalRegisters.jspx
You should see The Rask Group Pty Ltd listed as current on ASIC, under the Wattle Partners licensee. Wattle Partners itself has been a licence holder for decades.
(FYI - I'm quite sure you can also search for 'Owen Raszkiewicz' in the Authorised Representative search field and find my own listing)
2. ASIC - follow the same process but instead search for InvestSMART using the AFSL in the PDS (246441)
This time, instead of selecting the 'Authorised Representative' from the dropdown, select "Australian Financial Services Licensee" and use the AFSL number for InvestSMART Funds.
If every Aussie knew how to use this old and clunky website, there would be close to zero scams in Australia. Unfortunately, because few people know how to check, we lose billions every year in dodgy scams from overseas or even local people shelling properties, 'trading strategies' and so forth (they even get themselves on the radio and TV!).
3. InvestSMART Ltd (ASX: INV) - is also a public company (on the stock exchange), which you can find using ticker symbols ASX: INV
Being publicly listed was a huge reason we chose to partner with InvestSMART.
Every quarter and half year, my team and I can review InvestSMART audited's financial accounts, listen to their investor calls, and so on.
You can feel a bit more comfortable knowing they're monitored by ASIC (for licensing), ASX (for public markets conduct), shareholders (for oversight) and auditors (for fact-checking their reports). But there are legal obligations governing how directors (like Paul Clitheroe) must act.
Safeguards - “what would happen if…”
In the event that anything should happen to Rask, InvestSMART (being responsible for the service) would assume control of the portfolios and inform you. It's likely very little would change.
In the event that anything should happen to InvestSMART (extremely unlikely, but things happen), your assets (the ETFs or shares inside your portfolio) are ALWAYS owned by you with Rask Invest.
Why?
Given our unique structure, it's your Holder Identification Number (HIN) holding the assets - not ours.
We're not a "custodial" model like you get from a managed fund (e.g. Magellan), overseas broker (e.g. Charles Schwab), Industry Super (e.g. AustralianSuper) or one of those low cost brokers (e.g. like Vanguard Personal Investor service).
Basically, what that means is all of the assets/investments are tied directly to you - at the ASX level. The Australian Stock Exchange.
And if anything happens to the ASX? Well... the Government (and us) probably has bigger problems... but it’s about as secure as it can get.
Other things
We're going to start hosting meetings soon. Towards the end of the year I want to get all over the country and have a few dinners or intimate talks with our investors and most loyal supporters.
Last year we did a huge roadshow (1200 people + online) and it really took it out of the team doing 10+ cities (I loved it). So this year we'll probably stick with Melbourne, Perth, Brisbane and Sydney for bigger events. I'll likely also go to Adelaide, Canberra and wherever else our investors are located, just to say hello and thank them for their support.
I believe you're XXXX based, but I'm in XXXX this month (twice) and I am thinking of taking my young sister to the theme parks on the GC in a few months, so perhaps I can come by if you're around. Either way, we would love to meet in person. We're in Melbourne CBD if you would like to see the office or for me to take you to a great coffee spot (that's my third love: after my family and investing).
Finally, I can call you just about any time that mutually works.
Or jump into the Rask Community!
Bottom line: ALWAYS check the ASIC.gov.au website for every single financial provider you’re dealing with. Use their AFSL or Authorised Representative number to know who you are dealing with. If it’s a bank, always check the APRA website to see if they’re covered by the deposit guarantee: https://www.apra.gov.au/financial-claims-scheme-0
If they’re a financial adviser, always check the advice register.
NEVER go by what you read or watch on social media, never click links sent to you in email or text message, and never enter your credit card information if you are using a webpage where it doesn’t have a secure connection in the web browser! I could go on but I’ll stop here…