Investor Watch: BCSC concerned about wealth enhancement seminars

The British Columbia Securities Commission (BCSC) is issuing a warning to consumers about so-called “wealth enhancement” seminars that are being held throughout the country. The BCSC strongly urges consumers to avoid these types of seminars, and to consult with a registered advisor for any investment advice.

Many companies that put on investment seminars claim to provide proven wealth enhancement strategies to attendees. However, in the experience of the BCSC, these types of seminars (which are often marketed as “free”) are more likely to include substantial “membership” fees that provide access to questionable ways to succeed in business and/or to make money through things like precious metals, consumer debt, environmental projects, and international mutual funds.

Seminar presenters are careful to stress that they are only selling memberships into their organization and not investments. However, the BCSC remains concerned because, according to media reports, attendees could be encouraged to purchase investments at some point. They are also frequently encouraged to recruit their friends and family.

Often, supposed “wealth experts” will tell investors that they can move funds offshore to avoid paying tax. Remember, you can defer paying taxes, but you can’t avoid paying them. If the promised tax savings are false, you may also be required to pay the Canadian government money in back taxes, interest, and penalties.

Furthermore, the BCSC wants consumers to be aware that they increase their risk when money is moved offshore because it usually makes efforts to reclaim their money more difficult, if not impossible, should their investments go awry.

Help protect yourself by taking these steps before you hand over any money:

  • Check with the Canadian Securities Administrators’ (CSA) National Registration Search to see if the company or individuals offering you the investment are registered to sell securities.
  • Check the CSA’s Disciplined Persons List to see if an individual has been disciplined in Canada.
  • Do your own background check on the company and individuals by searching the Internet to see if they have previously used other company or personal names, and to look for any indication of past problems such, as other investors losing money or company bankruptcies. o Do a land titles or corporate registries search at BC Registry Services o Contact the Office of the Superintendent of Bankruptcy in Canada
  • If individuals promote a designation or other training, check into what was required and where the credentials come from.
  • Ask many questions about the investment and get information in writing. Consult with someone with business knowledge that is not involved in the deal to get a second opinion.
  • If the opportunity sounds suspicious, consider not going to any of their seminars, as once you are there it is difficult to say no to what is being offered due to high pressure sales tactics.

The BCSC strongly encourages investors to be cautious about anything they are offered through a wealth enhancement seminar, and to be extremely cautious about investments that involve any of the following warning signs:

  • Invitations to attend seminars in far away urban centres, for which you must pay a significant fee to attend
  • Marketing that plays on your desire to get your family out of financial debt
  • Investments that promise high rates of return with little or no risk
  • Individuals who describe impressive-looking credentials and designations that you are not able to verify (e.g. “wealth enhancement expert”)
  • Opportunities that are promoted through word of mouth by referrals of close friends or family

If the public has any concerns regarding investment seminars, they should report or forward this information to the BCSC immediately.