On Blogging Australia

My post yesterday on naming and shaming the shonky bastards talked about consumer advocacy. I am concerned about people who sell investment advice without a license.

Margaret Lomas responded to the Always Include The Batteries post again today and said:

Thanks for the offer. I think the main thing we can all do is encourage others to speak out about their experiences. You can not be personally sued if you receive a post from someone who genuinely had a bad experience. You see, for me to speak out and name names it can look like I am just trying to promote myself so I have to be careful.

Let me tell you about some of the sorts of things I mean.

Some spruikers advertise ‘workshops’, ’seminars’ or ‘boot camps’ where the offer is made that attendees will learn the ’secrets of the rich’ or ‘how to accumulate a property portfolio worth $x (usually millions) with no money down’ etc etc. Usually these workshops span a weekend and cost several thousands of dollars - often up to $10,000 per person, and many presenters actually offer a ‘finance’ deal to those who cannot afford the ‘tuition’.

These groups will usually use a company name which contains words traditionally thought of as being solid and ethical - ‘institute’ ‘academy’ etc to further lure the innocent.

The courses themselves contain either strategies with extreme risk, strategies which actually cannot be applied in the real world, strategies which are unethical or push the legal envelope, or in the worst cases, a further lure to attend an even more expensive special ‘event’ (reserved for only the 50 lucky people who can pay the $20,000 or so price) or to buy in to a property scheme involving high risk such as mezzanine financing or financing property developments with over enthusiastic forecasts about their money making abilities.

These courses will always be attended by successful ‘disciples’ who give their personal testimonial - typically the one percent of people who previously attended their courses who actually had the luck (and trust me it is always only luck or fortunate timing) to have made money from the strategies.

The story that is never told is the one about the other 99% of people who spent hard earned money to achieve nothing. In some cases, these people have used valuable savings or gone into debt in the hope of some sort of salvation for a future which they had previously thought held no hope for financial security - so they are reasonably desperate for an answer in the first place.

It is never revealed (or considered) that the presenter charging say, $2000 a head for a weekend workshop which attracts 150 people pockets $300,000 (less the costs to stage the event of, say $25,000) for two days’ work.

The personal financial circumstances, or details of the success of the presenter in using their own strategies to succeed is also rarely revealed - except to the extent that they may display pictures of themselves in front of a Ferrari or speak about the exotic lives they now lead which you too can enjoy if you follow them (blindly). Rarely does anyone consider that this lifestyle is more likely funded by exorbitant tuition fees than it is by successful investing.

And so on.

How about we encourage any one, from anywhere who has ever attended one of these types of courses to come on this site and tell us about what the real outcomes for them have been. They could tell us the price of the course and then advise if they received value for this money in concrete ways. Did they learn strategies they could really use? Did they get after course support? Were their own personal financial needs assessed and the strategies they learned structured to meet these individual needs?

May be we will find people who attended genuinely helpful courses at good value and this is great. Maybe we might protect others from suffering the same fate. Hey, what if we only save one person? Better we tried!

At the very least we might make this blog about more than just a conversation between you and me  (that really was a joke)

Meanwhile I will keep working on the government to get the legislation in place. I know it is impossible to believe that there is currently none at all, but apart from issuing vague warnings about people pushing property scams, ASIC really has no governance powers in this industry whatsoever. Very sad, but very true.

Am I the only one who is concerned about this stuff? Margaret quite rightly assumes that if she hangs crap on the shonky bastards selling property investment advice for $2,000.00 and more for the weekend, people will assume that she is nobbling the opposition. For myself, I have no profit motive at all for getting involved in this particular stoush - just a burning desire to see people be free of financial predators.

Soooo…. if I start DodgyBastards.com as a forum for people to report where and when they were ripped off, will it make a difference? Am I better off moderating blog postings or having a free-fire-zone forum? How will I deal with people that I agree with in parts (such as the consumer advocacy above) but who express other views (like white supremacy or extreme religious positions) that I might find abhorrent?