Point of view: how to protect yourself from investment scams

Imagine pouring your hard-earned money into an investment, trusting the promises of wealth and prosperity only to find yourself empty-handed, deceived, and abandoned. This is exactly the cautionary tale unfolding for those caught up in the financial schemes of Jacques Adriaan Jordaan—a name now ringing alarm bells thanks to the Financial Sector Conduct Authority (FSCA).

Let me share my personal insight here. Not long ago, one of my cousins found herself navigating through a sea of enticing investment offers on social media. The promises of "guaranteed high returns" were incredibly alluring, and the testimonials backing them seemed convincing. Luckily, she paused before making any decisions, and that pause saved her from falling into the trap of unauthorised financial advisors. She asked me for advice and I told her that what she was seeing was a scam and that she should be careful and not invest.

The FSCA has issued a stark warning against Jordaan, who has been luring individuals into his scheme with promises of unrealistic returns. The modus operandi? Soliciting funds and opening personal trading accounts under the guise of conducting profitable trades on behalf of his clients. Yet when clients come knocking for the promised returns, Jordaan disappears without a trace.

Here’s the critical truth: trading profits can never be guaranteed, and promises of unrealistic returns are a red flag that should scream "danger!" Jordaan is neither authorised by the FSCA nor operating within South African financial laws, meaning that any transaction with him is fraught with risk and lack of legal recourse.

Let me stress this: before trusting anyone with your money, do your due diligence. Ensure they are registered and authorised by the FSCA to provide financial advice and services. Here are some essential tips that can safeguard you from falling victim to scams like this one:

• Verify the person or entity’s registration on the FSCA website or via their toll-free number.
• Check what category of advice they are authorised to provide—many are only allowed to offer basic advice but stray into complex and risky territory.
• Match their FSP number to their name in the FSCA database. Any mismatch should be a major warning sign.

Remember, legitimate financial advisors will openly share their authorisation details. If someone avoids transparency or pressures you into making hasty decisions, take a step back.

Scams like Jordaan’s are a reminder that vigilance is your best defence in the world of finance. The FSCA has made it clear that unauthorised individuals and social media “investment gurus” are rife with deception. It is on us, the public, to question and verify every offer that comes our way.

Let's protect ourselves and each other. If something sounds too good to be true—it probably is. Don’t let the allure of quick riches cloud your judgment. Stay informed, stay cautious, and ensure that every rand you invest is in safe hands.

PERSONAL FINANCE