Guaranteed - 45% Gross Over 3 Years-Muldowney Group

oldtimer

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Would like to hear views on above which seems very attractive. Ad in Sunday Indo 3rd '' we are offering 15% gross return on investment per annum over a 3 year term. Thats a total of 45% gross over 3 years. And yes, its fully guaranteed. The minimum amount is €25,000 and its completely hands free, we do the investing, you take the money - simple.'' This sounds very attractive. The ad is by Muldowney Property Services. Have looked at their website www.muldowneygroup.com but cannot find any specifics on above. Any views or comments?
 

MugsGame

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Re: Guaranteed - 45% Gross Over 3 Years

Hopefully you know this is too good to be true, but want to work out what the catch is?

Is the product named in the ad? Who is the provider regulated by? Is the capital guaranteed along with the "return"? (I can guarantee you a 100% return this year if you are prepared to accept the "possibility" of a 100% capital loss!). The other thing that might be relevant is the tax treatment of any returns/gains/losses.
 

oldtimer

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Re: Guaranteed - 45% Gross Over 3 Years

Spot on, Mugsgame. Too good to be true - I want to know where is the catch. I have given the ad as it appeared, all positive, as it says ''you take the money - simple.'' No mention of a fund etc or who regulates it. Just other points mentioned in the ad '' Ideal for SSIA funds. High return-safe-secure.'' As you said, I want to know where is the catch?
 

MugsGame

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Re: Guaranteed - 45% Gross Over 3 Years

No mention of a fund etc or who regulates it.
I could be wrong, but I think its illegal to advertise investments in this way. Are you sure there was no small print giving regulatory information?
 

ClubMan

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Re: Guaranteed - 45% Gross Over 3 Years

Maybe somebody could scan and post the ad or summarise the text that it contained?
 

F. Kruger

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Re: Guaranteed - 45% Gross Over 3 Years

Saw the add and thought it was very similar to the Agusta product discussed on these pages before. They claimed an IIR of 14.7% pa.

It has to be a Syndicate Property Fund.

I don't think it is illegal to advertise the product this way, as these funds are not regulated.
 

oldtimer

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Re: Guaranteed - 45% Gross Over 3 Years

It is a coloured ad on page 14. Sorry not able to scan it.
(1) Heading is Muldowney Property Services alongside photo of multi story building
(2) Next is big print ''FINALLY AN INVESTMENT THAT GUARANTEES TOU WON'T LOSE'' (All in blue colour)
(3) Next line '' 15% ROI PER ANNUM GUARANTEED'' (All in red colour)
(4) Then in box in black print with green background - '' Have you considered investing in property but don't want the hassle of buying? They why not invest in our unique Property Fund? We are offering 15%* gross return on investment per annum over a 3 year term. Thats a total of 45%* gross over 3 years. And yes, its fully guaranteed. The minimum amount is €25,000 and its completely hands free, we do the investing, you take the money-simple.''

That is the full advertisement as on paper. Caught my eye immediately as it appears to be too good to be true. Tried website but could find no detail there. Am tempted to ring phone number but would like to hear views on AAM first.
(5) In small print ''*interest subject to deduction of tax at the standard prevailing rate (currently 20%)''
(6) Next line ''IDEAL FOR SSIA FUNDS'' (in big blue print)
(7) Next line ''HIGH RETURN-SAFE-SECURE
(8) Bottom lines '' Mon-Fri 9am-5pm 1890 350 450
www.muldowneygroup.com
Head Office; 166 Lower Rathmines Road. Dublin 6.''
 

CCOVICH

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Re: Guaranteed - 45% Gross Over 3 Years

Call them and ask for a detailed prospectus.
 
G

gonk

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Re: Guaranteed - 45% Gross Over 3 Years

If you think about it logically, it doesn't make a lot of sense.

If they have devised a scheme that can produce a guaranteed 15% annual return, why are they raising funds from the public to invest in it? If they can show the return is certain, any bank would be happy to lend at 5% or 6%, leaving them with a handy 9% margin.

If you do ring them, ask them why they're not doing this instead of unnecessarily handing over money to individual investors.
 

woods

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Re: Guaranteed - 45% Gross Over 3 Years

If you think about it logically, it doesn't make a lot of sense.

If they have devised a scheme that can produce a guaranteed 15% annual return, why are they raising funds from the public to invest in it? If they can show the return is certain, any bank would be happy to lend at 5% or 6%, leaving them with a handy 9% margin.

If you do ring them, ask them why they're not doing this instead of unnecessarily handing over money to individual investors.
Because they are going to use the money that they collect from the investors as leaverage and for every 100K they get from you they will get a further 300K from the bank at the 5% which will mean that the average that they will pay out will be 7.5% even if they give you 15%.
 

MugsGame

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Re: Guaranteed - 45% Gross Over 3 Years

That makes sense in terms of how the deal could be structured, but gonk's argument still holds. The bank aren't willing to put up all the money for the deal -- why? The investor must be taking more risk than the 'guarantee' suggests.
 
G

gonk

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Re: Guaranteed - 45% Gross Over 3 Years

What I'm simply asking is why, if they can demonstrate a 100% cast-iron guarantee of 15% annual returns, with adequate security for the capital, any bank wouldn't give them all the money they want without any need to raise money from the public? They'd surely profit more by doing this.

On the other hand, if they can't demonstrate these things, the claims in the advertisement would be somewhat dubious, to say the least.
 

Marianne

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Re: Guaranteed - 45% Gross Over 3 Years

This illustrates a big gap in the Consumer Protection Code. As F. Kruger states above, the so-called "guaranteed investment" is presumably some property transaction, which is not regulated by the Financial Regulator.

The Consumer Protection Code http://www.financialregulator.ie/data/pub_files/Code_Doc_rollover-4-2.pdf devotes an entire chapter (7) to advertising and the various warnings and caveats that must be included in an advertisement for an investment product. Yet if it's a property deal, which may well involve substantial investments from consumers, there are no rules.

To rub salt in it, from their website, Muldowney Group do offer investment services and mortgage services that are regulated by the Financial Regulator. So if they are advising their clients to invest in a Managed Property Fund (regulated), they must go through the whole process of fact-finding, Terms of Business, disclosure of commission, abide by advertising rules etc. But if they advise a client to invest in a direct property investment (unregulated), none of this applies.

To be clear - I am not for a moment suggesting any impropriety on the part of the Muldowney Group - if the advert relates to an unregulated investment type, they are acting completely within the rules.
 
Z

z108

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Re: Guaranteed - 45% Gross Over 3 Years

This isnt 15% apr ? What APR is it ?
If I invest 25,000 euro am I guaranteed back 36250 (145%) after 3 years into my hand and is that before or after tax ?
Whats the real guaranteeed return into my hand after tax after 3 years?


Like a lot of guarantees, unless a third party holds the money, the strength of the guarantee is only as strong as the strength of the Muldowney Group.
 

oldtimer

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Re: Guaranteed - 45% Gross Over 3 Years

Rang Muldowney Property Services to-day - yep - was told I will get 45% interest on my investment in three years, no problem. Comparison was made with ''Augusta Fund'' as mentioned by F. Kruger above (of which I know nothing about). I suggested I would send €25,000 to-day but was told somebody would talk me through it ''we have a few people on the road.'' When I said the ad stated it was 'simple and guaranteed'' I was told if I wish to put the money in the post, fine. Comment made the investment was almost full. Prospectus in post to me - should have it to-morrow or Friday. If I was living in Dublin would have called for it. Cannot wait to get my hands on it.
 

ClubMan

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Re: Guaranteed - 45% Gross Over 3 Years

These guys sound good - I think I'll give them my life savings too!
 
G

gonk

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Re: Guaranteed - 45% Gross Over 3 Years

Comparison was made with ''Augusta Fund'' as mentioned by F. Kruger above (of which I know nothing about).
I should point out in fairness to Augusta (with whom I have an investment) that while their advertisements and prospectuses contain "projected" returns, they make no claims that these are guaranteed. Their prospectuses also give detailed information on the assumptions used to make the projections, as well as the main investment risks.
 
G

gonk

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Re: Guaranteed - 45% Gross Over 3 Years

To rub salt in it, from their website, Muldowney Group do offer investment services and mortgage services that are regulated by the Financial Regulator. So if they are advising their clients to invest in a Managed Property Fund (regulated), they must go through the whole process of fact-finding, Terms of Business, disclosure of commission, abide by advertising rules etc. But if they advise a client to invest in a direct property investment (unregulated), none of this applies.
As this article from the Business Post last February explains, many property-based funds which are promoted by regulated institutions, such as life assurance companies, are effectively not covered by the Regulator either:

http://archives.tcm.ie/businesspost/2007/02/18/story21101.asp

From the article:

"Colm Fagan, President of the Society of Actuaries, warned for the second time of the dangers of investing in unregulated property investments and suggested that such schemes be brought within the remit of the Financial Regulator.

In particular, he warned that 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 advisers that are regulated in respect of other activities. In other cases, he warned, the unregulated property fund may be ‘‘wrapped’’ inside a regulated product such as a life assurance policy or a pension.

‘‘While both the ‘wrapper’ and promoter may be regulated, the underlying property investment is often held in an unregulated vehicle such as exempt-unit trusts, shares in private companies or co-ownership arrangements. This can lead to risks that most investors are unaware of, including potential problems in realising the investment, transparency on costs and valuations,’’ Fagan said."
 

oldtimer

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Re: Guaranteed - 45% Gross Over 3 Years

Quote by Clubman ''these guys sound good - I think I'll give them my life savings too.'' Are you serious?
 
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