Interactive tax Software

Illegal managed investment schemes are among Australia's worst investments.

Nurses, retired people, professionals, church groups, ethnic communities and even police have lost hundreds of millions of dollars over the past ten years by investing in these schemes. Use our safety checks to avoid them.

What's a managed investment scheme?
In a managed investment scheme:
Your money and other members' contributions are pooled together or used in a common enterprise to produce financial benefits for scheme members.
You and other members give up day-to-day control over the operation of the scheme to someone else.

A great many investment opportunities are structured as managed investment schemes. The most common managed investments schemes include:
cash management trusts
property trusts
equity (share) trusts
agricultural investment schemes (for example, pine trees, olives, flowers or fish farming).

More unusual types of investments can also be structured as managed investment schemes, for example:
betting schemes some lottery syndicates
small property syndicates
timeshare schemes and
managed mortgage schemes.

What's an illegal scheme?
Generally, it's illegal to offer interests in a managed investment scheme unless the scheme is registered with ASIC. Some exceptions exist:
when all offers are made to wholesale investors
offers in some schemes which have fewer than 20 members.

If you are offered one of these special exceptions , make certain you really understand it inside out, and that it's suitable for you. Otherwise, stick to registered schemes and take advantage of the protections of the Corporations Act.

Who starts illegal schemes?
Some illegal schemes are started by well meaning but incompetent people who don't know the law and have no idea what they are getting into. They get a bright idea to make money, but they have none of the skills and systems to manage other people's money efficiently, honestly and fairly.
Other illegal schemes are started by shady and dishonest people who set out to cheat you. They operate outside the law because it's much easier to cheat you when they don't have to follow any rules.

Safety checks for managed investment schemes
Help yourself avoid Australia's worst investments by doing 3 basic safety checks before investing any of your money.
Use information that's available free of charge on ASIC's databases to make sure any scheme you're interested in is playing by the rules.