Recently, I was at a presentation on the changing face of regulation and the Financial Conduct Authority (FCA). It was delivered by the chair of the FCA and hosted at a top law firm which has a real estate and private equity fund practice.
After the presentation another member of the FCA introduced themselves to me. It was more to be social than anything else, just a chat with a cup of tea while 'networking' after the talk.
I mentioned that I had recently been sharing my perspective on FCA PS 13/3 through a couple of articles published here in Property Investor NewsTM. I went on to explain slightly how it might impact on property investors. This led to a tangent into a recent business hic-up which has been topical in the online property circles. To provide a bit of background, I mentioned how a website was promoting the 'opportunity' and the conflict with FCA PS 13/3. When I said the headline for the offer was 12.0% in 12.5 weeks the FCA staff person expressed surprise with the following line: "They [the investors] know better, certainly?" The look of surprise that anyone would consider such an investment said it all.
Blinded by the sizzle
If I said an investment paid north of 70% a year, what would you think? How about just saying you could double your money every 13 months? While it is common for people to hear that property doubles in value over 10 years, doubling in 13 months is a whole different matter.