Any views about BlueChip NZ

[Snow Leopard]

As far as I am concerned this company was always dodgy. But that is little consolation to those who are currently out of pocket.

[George]

I share the view of BB a bit. Saw the item on tv this week about
a woman who borrowed 100% against her home on an apartment with
a 'valuation' of 525k which is only 'worth' about 350k.
While I wish well anyone trying to get ahead, is there a touch
of greed here?
Good luck when speculating/investing, but don't cry if it goes wrong.
George

[Arbitrage]

There probably is a certain amount of greed in deciding which investment to make. However there are a number of other things operating here (and with many of those also caught up in finance company collapses).
Some investors are not finacially literate and rely on financial advisors to help them make investment decisions. They rely on registered valuers to determine the value of property to help their decision making on purchases. They rely on real estate agents to treat them honestly. If one can not rely on a range of "professionals" in the investment industry what can you do?

[Jay]

I always thought that with the majority of "companies" offering rental guarantees, the purchase price/value was bound to be inflated to cover themselves. What you really are doing is paying the rent you will receive or a high portion of it (and no doubt extra fees/commissions) in advance to them whom then pay it back to you as rent. Who wins? Not you, cause you have borrowed the money in the first place to pay yourself later.
The main thing to be concerned about is will the company offering the guarantee still be around in the 2 – 5 years of the at guarantee and what will the real rents be after that.

[Year of the Tiger]

There probably is a certain amount of greed in deciding which investment to make. However there are a number of other things operating here (and with many of those also caught up in finance company collapses).
Some investors are not finacially literate and rely on financial advisors to help them make investment decisions. They rely on registered valuers to determine the value of property to help their decision making on purchases. They rely on real estate agents to treat them honestly. If one can not rely on a range of "professionals" in the investment industry what can you do?

There is an interesting article in the Feb issue of the NZ Asset Magazine.

It focuses on the new disclosure rules for Financial Advisers due to come into effect at the end of this month.

In summary, under previous legislation advisers only has to supply limited information to clients, such as previous criminal convictions, ON REQUEST.

The new regualtions now require investment advisers to disclose five types of information to clients BEFORE ENGAGING IN ANY ADVICE.

• experience and qualifications
• criminal convictions
• fees
• other relevant interests and relationships
• types of investments that the adviser advises on

It'll be interesting to see how this plays out in reality.

YOTT

[STRAT]

I always thought that with the majority of "companies" offering rental guarantees, the purchase price/value was bound to be inflated to cover themselves. What you really are doing is paying the rent you will receive or a high portion of it (and no doubt extra fees/commissions) in advance to them whom then pay it back to you as rent. Who wins? Not you, cause you have borrowed the money in the first place to pay yourself later.
The main thing to be concerned about is will the company offering the guarantee still be around in the 2 – 5 years of the at guarantee and what will the real rents be after that.

Those guarantees are for fixed terms. When the term ends thats when the **** hits the fan with little comeback on the perpetrators. There is and always will be a new con every day and these kinds are always set up on the right side of the law and gone by the time the law is changed/catches up.

[patsy]

Some people are too stupid to have any money and deserve to be fleeced.

Since the start of BlueChip fiasco, the Herald has been publishing all sorts of "heartbreaking" stories of all of those "investors" who are at risk of losing their own homes because of using it as collateral to buy into BlueChip. The articles are sprinkled with a heap of references to purchases of "luxury apartments" or purchases of "several investment properties", etc. Plenty of very fashionable statements from "investors" who thought of themselves as in the money and in the "in" crowd. Last week, there was the story of someone 90% leveraged, with the other 10% borrowed against her own home, and shortly facing retirement.

Frankly, I have no sense of compassion and sympathy for those people.

[tim23]

Agree Patsy was obviously too good to be true; I have zero sympathy!

[Arbitrage]

While some of the affected investors have put all their eggs into this dodgy basket knowing the risks, there are some who have relied on "professional advisers" to choose this investment for them. I am sure we know a few elderly people or others who are not financially literate who use financial advisers to determine their investments. These are the people I have sympathy for when they get caught out.

[Steve]

While some of the affected investors have put all their eggs into this dodgy basket knowing the risks, there are some who have relied on "professional advisers" to choose this investment for them. I am sure we know a few elderly people or others who are not financially literate who use financial advisers to determine their investments. These are the people I have sympathy for when they get caught out.

Quite often, the reality is that these "professional advisers" are just salespeople for Blue Chip. A simple scratch at the surface should have given this away...