South African Regulator Flags QZ Asset Management: Investors Beware

Investors Beware
  • Public Warning: The Financial Sector Conduct Authority (FSCA) has issued a public warning against QZ Asset Management Customer Service Consultants (Pty) Ltd. The FSCA advises the public to exercise caution when dealing with the company due to its unauthorised status and the numerous complaints received against it.
  • Investigation Underway: The FSCA has initiated an investigation into QZ Asset Management following allegations of a multi-level marketing scheme and the inability of clients to withdraw their funds. The company, linked to a Chinese-based firm, has been offering investment services using Big Data Artificial Intelligence (BDAI) and promising high returns.
  • Regulatory Compliance: The FSCA emphasizes that any company offering financial products or services in South Africa must be authorised by the FSCA and, in some cases, the Prudential Authority. QZ Asset Management is not authorised or registered under any legislation administered by these bodies. The FSCA urges the public to always verify the authorisation of any entity or individual offering financial products or services.

The Financial Sector Conduct Authority (FSCA) has issued a public warning against QZ Asset Management Customer Service Consultants (Pty) Ltd (QZ Asset Management), urging the public to exercise caution when conducting financial services business with the company.

The FSCA has received information linking QZ Asset Management to a Chinese-based company, Qianze Asset Management Limited (QZ Asset Management China). The latter confirmed that QZ Asset Management has been providing customer services to its South African clients, including administrative support such as client liaison and account-related services.

However, the FSCA has been inundated with complaints against QZ Asset Management and its multi-level marketing scheme. These complaints are related to the website of QZ Asset Management China being taken down and clients of QZ Asset Management being unable to withdraw their funds.

QZ Asset Management China has stated that it offered investment in equities and stock indices using Big Data Artificial Intelligence (BDAI), a software which automated investment decisions. South African clients have reportedly invested into the scheme, with investors being promised returns of up to 400%.

The FSCA has now commenced an investigation into the allegations made against QZ Asset Management. The authority has pointed out that for a company to offer financial products or services in South Africa, it must be authorised by the FSCA and in some instances also the Prudential Authority. The FSCA can confirm that QZ Asset Management is not authorised or registered under any legislation administered by the FSCA or Prudential Authority.

The FSCA has promised to inform the public of the outcome of its investigation. In the meantime, it has urged members of the public to always check that an entity or individual is authorised by the FSCA to provide financial products and services, including for giving recommendations about how to invest.

The FSCA has also highlighted the importance of understanding what category of advice the person is registered to provide, as there are instances where companies or people are registered to provide basic advice for a low-risk product and then offer advice on far more complex and risky products. Getting poor financial advice can bring severe harm to investors.

Customers who wish to use the financial services of an institution or person can check this before any purchase or investment is made, by calling the toll-free number: 0800 110 443, or by conducting an online search for authorised financial institutions by license category on the FSCA website.

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