[Article] Warning on unregulated property investments

Victor

http://www.rte.ie/business/2007/0209/property.html

Warning on unregulated property investments
Friday, 9 February 2007 10:08

There has been a warning about the dangers of overseas property investment schemes from the Society of Actuaries.

The Society's President, Colm Fagan, says of particular concern would be individual buy-to-let investments, often overseas, which are completely unregulated and are not subject to the normal statutory protections afforded to retail investors in regulated products.

He says he is concerned that these schemes are being offered to ordinary retail customers, as they often promise very high, misleading returns.

'It can be difficult for the consumer to spot that some investments are unregulated, given that they may be promoted by entities - such as banks, life assurance companies or financial advisors- that are regulated in respect of other activities', he warned.

He says some schemes have very exaggerated claims, but with little articulation of the risks, with higher charges and commissions not being disclosed.

Speaking at the Society's biennial dinner last night Mr Fagan said the average Irish investor has a much greater exposure to property assets of various kinds than investors in most other countries, due to the lack of diversification in their investment portfolios.

He added that sometimes the unregulated property fund may be 'wrapped' inside a regulated product, such as a life assurance policy or a pension.

Mr Fagan also cautioned about the risks of certain collective property investments.