PERHAPS nothing is more tempting than trying your luck at "investments" that promise quick and easy returns, like money games. You just need a fair bit of money and little bit of effort and - voila - lucrative returns.
Except, there is no such thing as a free lunch.
The JJ Poor-to-Rich, or JJPTR, became a household name for all the wrong reasons after it hogged the headlines when the company ran into trouble after reporting it had lost US$400mil (S$559 million) due to a purported "hacking job". The founder has now been arrested.
Why do people "invest" in plans that look and smell like ponzi schemes?
According to independent financial advisor Yap Ming Hui, wealth managers employed by banks contribute to the proliferation of such scheme, even though they weren't the ones who created or promoted them.
"They are only interested in selling and convincing customers to purchase their products but there's no after-sales service," he said.
Yap says these bankers do not keep in touch with the customers, especially when a problem crops up. The banks also do not provide the support needed by their customers.
"They need to tell clients how to manage their funds properly instead of just providing them with figures and achievements which they may not understand," he says
Financial freedom is what most people seek, and Yap believes that this should be the job of wealth managers: to be on hand to guide their clients in order to achieve what they are aiming for.
He also questions if banks have well-trained consultants to manage the funds they offer.
"If the public sees that financial freedom is within reach, then they will not stray away from the regulated path," says Yap, who is the managing director at Whitman Independent Advisors.
He notes that scam operators often do not look like scammers.
"They have many ways to market their products, and it is not easy for investors to tell whether it is a scam or not," says Yap at the launch of Whitman's Holistic Wealth Management programme.
According to him, a specially trained wealth manager is assigned to a client on a yearly retainer basis to assist them at every juncture. They also assist clients to evaluate various investment proposals to determine their suitability.
Whitman says it will be initiating a CSR programme to offer a one-hour free consultation to victims of money games and scams.
For details on the programme, you can call 03-7880 8359.