Spotting a Ponzi Scheme – How to Protect Your Superannuation
Ponzi schemes have been deceiving investors for over a century, yet they still claim victims today.
Named after Charles Ponzi, these fraudulent schemes pay returns to earlier investors using funds from new investors—rather than from genuine profits. There is often no real investment activity happening at all, and the illusion of success collapses when new investments dry up.
Red Flags of a Ponzi Scheme
1. Guaranteed or Unusually High Returns
All investments carry some level of risk. If someone offers above-average returns with “no risk,” treat it with extreme caution.
2. Overly Consistent Performance
Markets fluctuate. If an investment performs strongly every month regardless of conditions, that’s suspicious.
3. Unregistered or Unlicensed Operators
Avoid any advisor or fund not registered with ASIC or without the proper licenses.
4. Complex or Secretive Strategies
If you can’t clearly understand where your money is going, or you’re discouraged from asking questions, walk away.
5. Pressure to Reinvest or Recruit
Ponzi schemes often rely on reinvested “profits” and recruiting new investors to survive.
Why Working with a Financial Advisor Helps
Due diligence is the most effective protection against scams. At Strategem, we:
✔ Operate an internal investment committee with no product-related financial ties
✔ Follow strict due diligence when selecting investments and fund managers
✔ Ensure diversified investment strategies to reduce risk
✔ Engage independent external investment managers for recommendations
✔ Use a separate responsible entity to oversee all investment purchases or changes
This structure means every recommendation is backed by thorough review, transparency, and independence.
The bottom line? If an investment sounds too good to be true, it probably is. Protect your superannuation by working with licensed professionals who put your security first.
Need Help?
Strategem Investment Services holds its own Australian Financial Services Licence (No. 244222) and Australian Credit Licence, and is a registered Tax (financial) advisor (No. 24786514). We’re here to help you build a secure and confident financial future.
📍 Offices in Bendigo & Melbourne
🌐 www.strategem.com.au
📞 Contact us today to book a consultation.
We are here to help
If you need further advice, please do not hesitate to contact our office on (03) 5445 4777 and one of our Accountants & Advisors are available to support you.
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If you have any concerns about investment scams or would like to learn more about protecting your wealth, book a chat with one of our financial experts today.
