Sharechat Logo

ASB warns investors

Rob Hosking

Wednesday 7th September 2005

Text too small?
ASB Group Investments has issued a warning about some finance company debentures, saying investors do not know the degree of risk they are taking on.

"Investors need to speak to accredited advisers," says ASB Group Investments head Rob de Luca.

There has been a surge in popularity of such investments over recent years, and ASB says it has taken a look at the risk underlying some of those investments.

"Our research shows the average earnings from these sort of investments ranges between 15-40%. They're paying investors 9-10%.

"Now that says that in many cases the investors are not aware of the extent of the risk they are taking and they are not getting an adequate return for that risk.

"Investors put their money with finance companies, seduced by the phrase 'first ranking secured deposits' but in many cases their money is anything but safe,"

The research - which ASB is not releasing in full - is not a case of the company bagging the competition, says De Luca.

"There's about $8 billion in theses sorts of investments: retail funds is up about $20 billion. They're not a threat."

However, he says ASB is concerned that investors are going to get burned, and that will hurt the industry overall.

"We're very much saying: 'investor beware'. When you are looking to invest money use an accredited advisor who is going to ask those questions about risk. Find out what you are taking on and whether the return you're getting is adequate for the sort of risk which you would be running."

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Sky CEO put on notice by chunky vote against salary share scheme
Unions gearing up to oppose 'market tests' on Fair Pay Agreements
Mandatory farm plans scorned as 'tick box' exercises
Kiwi dollar firms on weak US retail data, capped by rate-cut expectations
17th October 2019 Morning Report
SkyCity hoses down union claims over potential job losses
OPINION: Fair Payment Agreements and 'swallowing vomit' - the lot of the CTU
MARKET CLOSE: NZ shares gain; Restaurant Brands climbs on upbeat outlook
NZ dollar stalls after Bascand's rate cut comments
Bascand says RBNZ will consider changing bank capital proposals

IRG See IRG research reports