Click HERE to see the news. The article includes a photo that was apparently taken in secret.
Convoy Financial Services is the largest pseudo-independent financial advisory company in Hong Kong. The company doesn’t sell objective advice; it sells ripoff insurance products. 90% of its revenue is derived from ILAS commissions (i.e., kickbacks from the insurers who manufacture these exploitative products).
The news story is written in Chinese, so I asked some friends to help translate and summarize. Here’s the headline and subheadline:
Cold Callers Falsely Represent Themselves as Appointed by MPFA, Then Peddle Funds
Non-Locals Call for Invitation, Emphasizing Free Service
One of my friends described the news story like this: “Convoy hired an outside offshore marketing company to make calls here, pretending that they are staff from MPFA and want to meet up with the victim. When the victim sees Convoy, you know the rest.”
Another friend summarized it like this: “The reporter received a call from a non-local, and agreed to meet up. But it was a senior wealth management consultant from Convoy who came to the meeting, and mentioned Convoy does cooperate with the marketing firm but declined that she was appointed by MPFA, and was only instructed by her supervisor to explain MPF plan to client. The reporter contacted Convoy for questions and Convoy denied any wrongdoing, saying the company will conduct an internal investigation. MPFA has received several complaints about this type of fraudulent scheme (involving not just Convoy) and has asked the police to investigate.
Note: MPFA stands for Mandatory Provident Fund Schemes Authority, the regulator for Hong Kong’s compulsory retirement savings program. When the article mentioned that the Convoy adviser was peddling funds, presumably she was peddling funds wrapped in an ILAS, which can increase the commission payout by a factor of several hundred. These massive commissions are fraudulently hidden by a deceptive fee structure and bogus bonus units. Multiple Chinese ILAS victims have told me that their adviser never explained that they were buying an insurance policy (linked to the value of funds) and not actual funds.
It will be interesting to see how the police deal with this.