FSB warns investors against NaxaInvest

By Staff Writer

The Financial Services Board (FSB) has this week warned investors against investing with NaxaInvest. The regulator said NaxaInvest is not authorised as a financial services provider and is not a representative of an authorised financial services provider. “Persons rendering financial services without a licence or without being appointed as representatives are acting in contravention of the Financial Advisory and Intermediary Services Act, 37 of 2002. Such contravention is an offence, which carries a heavy fine or period of imprisonment,” it added.

Unrealistic returns?
Justmoney could not access NaxaInvest’s website but found a PowerPoint presentation online, which claims that the company was started in 2013 and is headed up by Cornelius van der Merwe. Some reports say that van der Merwe is a former Defencex member.

In the presentation, the company claims to be able to earn 2% profit on a daily basis on investments. It adds that ‘a total of 10% profit will be paid out every Friday’ and that investors can withdraw their original investments every 90 days by logging a request before Thursday 20:00. NaxaInvest warns investors that they may not withdraw their original investment within the 90 days period. The company makes no mention of how or where the money is invested.

Gavin Came (pictured), chairman of the financial planning committee of the Financial Intermediaries Association, said NaxaInvest is exactly the same as Defencex. Defencex has recently had its bank accounts frozen after it was feared that the company was operating in contravention of the Bank’s Act.

“The answer I have for the public is that anything promising this type of return will catch you out, especially if you don’t know what the risks are,” said Came. Came explained that with any investment it’s important to understand the risks before investing in it. “Sometimes it’s simple and the investment is found to be nothing more than a Ponzi scheme, but some investments are more sophisticated than that. Bottom line is you have to find out how they are providing these mouth-watering returns that banks can’t provide.”

Get a second opinion
According to the records of the FSB, NaxaInvest has not applied for a licence to be authorised as a financial services provider. The entity was also never inspected by the FSB. The FSB said consumers can check beforehand with the FSB on either the toll free number (0800110 443) or on the website www.fsb.co.za as to whether or not such institution or person is authorised to render financial services.

Came said investors can protect themselves further by seeking the advice of a registered financial advisor. “Being registered with the FSB can provide a degree of comfort but it’s an administrative process. The next important step is to ask a financial advisor whether they think an investment is a good idea. If they advise you incorrectly then they can be forced by the FAIS Ombud to give you your money back.”

The FSB’s warning about NaxaInvest comes shortly after it’s warning about Motsoto’s Trading, which it issued earlier this month.

Recent Articles

Featured Register your customary marriage or lose the right to inherit estate

December is that time of the year when we will see at least one suitor sending his uncles to negotiate the price of his future wife. Lobola, as the bride price is known, has always been an important element of the African marriage.

Read more

Changing from one medical scheme to another - effortlessly

It is coming up to the end of the year and you might be looking to change medical schemes, or options within a scheme in preparation for the new year. While you don’t necessarily have to wait for year-end to do so, providers often recommend it.

Read more

Your guide to financially surviving Christmas

There are a few times each year where you need to dig deeper into your pocket and spend more money such as birthdays, anniversaries, and the Christmas period. Whether you celebrate this religious holiday or not, the festive period - depending on how you choose to spend it - means increased travelling, buying of gifts, entertaining, and eating out at restaurants.


Read more

Trump, Trump and a little bit of South Africa

What a November we had, with the rand staging one of its best months and closing below the R14.00 level. To be honest, this looked like quite a far-fetched possibility at one stage during the month. It seems that the tide has changed a little, even though it might be short lived since the US dollar bulls are not so sure of their case anymore.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Free iCollege Scholarship

Price: R600
When: Until 16 May 2019
Where: Nationwide

Telkom December Big Deal

Price: R459 pm
When: Until 31 December
Where: Nationwide

Money Savvy Kids Giveaway

Price: R450
When: 8 December
Where: Johannesburg (Milpark)