Hello everyone
ASIC alert on share sale scams
ASIC has issued a warning about the recent rise in reports of “stolen shares” from individuals who have had their personal identity compromised.
Consistent with the growth in scammers targeting Australians (and not just from that charming Nigerian Prince who is willing to share unclaimed lottery winnings with you for a fee), fraudsters are now finding victims by selling people’s individually owned shares and depositing the sale proceeds into a bank account controlled by the fraudster. Victims only find out they’ve been fleeced once they receive a confirmation letter in the mail from the share registry or CHESS system – typically after the end of the month.
The fraudsters’ method is usually to set up a share trading account claiming to be “Jane Citizen” to enable them to sell shares owned by the real Jane Citizen. Stolen/fake ID is used to open the account. Fraudsters often obtain personal identification and Security Reference Numbers/ Holder ID Numbers (SRNs/HINs) through phishing, hacking, or intercepting documents for Jane Citizen’s shares. A fraudulent bank account is then used to receive proceeds from the share sale (T+2) before it is promptly transferred overseas – surprise, surprise!
ASIC is strongly encouraging all investors to be vigilant across all their investments, particularly direct and issuer sponsored shares that traditionally are not managed by their independent adviser or stockbroker.
As a solution, some of our existing clients have been utilising a low-cost investment wrap account to hold their shares on their behalf, which provides increased security. Dividends will then be paid directly into the wrap account. A nominated bank account can then be linked to the wrap account, and we can arrange for regular consistent income to be paid to you on an ongoing basis, rather than a twice yearly feast or famine dividend dump.
Additionally modern full service investment accounts now provide slick daily performance and comprehensive tax reporting, which is a significant help in the event of a wind up of an estate. Spare a thought for the poor soul who you have nominated as your Estate Executor who is tasked with calculating historical capital gains for the measly sum of $0!
Indeed, as a cautionary example, the estate of one of my clients who passed away over two years ago (who explicitly requested that her direct share portfolio be managed by herself) is still in probate purgatory. Her elderly husband? He is still waiting for the online broker to transfer the shares because they are demanding enough paperwork to rival a legal drama series. Joint bank account or not, this saga is not ending any time soon!
By organising your investments wisely – such as providing the purchase price and cost base for your shares – you can save your beneficiaries a world of tax headaches. Let’s face it, the executor has enough on their plate without becoming an amateur tax consultant. Plan ahead, stay vigilant, and remember; in today’s world, even your shares might need a bodyguard!
Key advice for investors
- Consider using an investment wrap account to house your direct shares through your independent financial adviser. The advantages are that it provides great security, complete tax history, personalised performance reporting and estate distribution simplification.
- ASIC encourages investors to do the following:
- avoid sharing sensitive details like SRNs/HINs.
- use unique passwords and enable two-factor authentication for share trading platforms.
- review your share trading accounts for unauthorised transactions/changes.
- be cautious of unsolicited emails/texts/calls for people/companies.
You can read the full ASIC warning here.
Please don’t hesitate to contact Theo, myself or any of the team if this edition of eGrow raises any questions; call (08) 8130 5130 or email admin@marinisgroup.com.au
Yours sincerely
Jason Zanini CFP®, B.Ec., MCIFAA
Financial Adviser
Authorised Representative
