Look before leaping into offshore investments
The Australian Securities and Investments Commission (ASIC) is encouraging investors to use a report highlighting unstable offshore financial centres.
The Australian Securities and Investments Commission (ASIC) is encouraging investors to use a report highlighting unstable offshore financial centres.
The survey was conducted by the Financial Stability Forum and analysed the safety and regulatory systems of financial centres around the world.
ASIC says in the event of an offshore investment failing, whether or not an investor gets their money back depends almost entirely on the effectiveness of the legal and supervi-sory system in that country.
The regulator also says that secrecy provisions can restrict efforts to establish the identity of company owners and a lack of proper infrastructure may mean claims cannot be pur-sued.
The report divided financial centres into three categories, based on the quality of the legal system and relevant regulatory authorities.
ASIC Office of International Relations Director Rose Webb said many consumers had lost funds sent in less regulated offshore financial centres.
"While investing overseas may be an appropriate strategy if done through proper chan-nels, consumers should be aware of the risks involved," Ms Webb said.
The report surveyed 67 financial centres, recommending work by the International Monetary Fund in those which fare poorly.
ASIC suggested investors take care, or steer clear of the worst group until standards im-proved.
This group was Anguilla, Antigua, Barbuda, Aruba, Belize, British Virgin Islands, Cay-man Islands, Cook Islands, Costa Rica, Cyprus, Lebanon, Liechtenstein, Marshall Is-lands, Mauritius, Nauru, Netherlands, Antilles, Niue, Panama, St Kitts, Nevis,St Lucia, St Vincent, the Grenadines, Samoa, Seychelles, the Bahamas, Turks and Caicos and Vanu-atu.
AUTHOR
Jason Spits
Recommended for you
More than 25 winners have been announced at the second annual Australian Wealth Management Awards.
A former financial adviser has been extradited from New Zealand after being alleged to have misappropriated $4.1 million from 13 clients.
Adviser numbers have continued the winning streak for the 2025–26 financial year with the seventh consecutive week in the green, buoyed by a steady flow of new entrants.
Netwealth chief executive Matt Heine has explained the platform is focused on accelerating its share of the affluent advice market as its NPAT reaches $116 million.
