“Financial training” – do you need an FMA licence?

Courses, training and other plans relating to “financial intelligence” are being offered increasingly frequently!

Many individuals and companies advertise with claims of knowing the best way to make a lot of money quickly. They offer people in Austria of all ages, especially young people, subscriptions for webinars, training programmes or other finance courses, which often cost several hundred Euro. Such providers also make use of “Multi Level Marketing” (MLM) to reach a lot of customers more quickly. Customers are sometimes given discounts on subscription fees if they in turn recruit other customers.

Subscribers are initially given general information through various channels, in particular videos and apps. Some of the tips given are thoroughly justified, e.g. how to obtain an overview about your income and outgoings. Then there is general information about trading in foreign exchange (Forex) products, binary options, contracts for difference (CFDs) or even cryptoassets as well as market analyses. In doing so, the subscriber is often given the impression that they will not need to do anything else apart from following the provider’s general product recommendations and that they will be able to earn money “overnight”. The term “passive income” is also frequently used in this context.

Trading in such products is often presented in such a way that it was previously the exclusive reserve of the affluent and for banks, as a way to increase their wealth, and that access is now being granted to ordinary citizens to accumulate money easily in this way – and that all they need is the right partner.

However, they do not check the subscriber’s financial situation and do not provide recommendations based on the knowledge and financial position of the customer. And subscriptions are linked with high costs.

Ultimately, trading in products like forex products, binary options, CFDs or cryptoassets is very risky. The products are high risk ones, are often designed in a very complex manner, and often have a very high potential for losses.

Such undertakings are not supervised by the FMA! The FMA supervises persons and undertakings that provide “investment advice”. This means that such persons must draw up a client profile and check whether the products they recommend to their clients are appropriate and suitable for them, and must explain about the risks of the products(https://www.fma.gv.at/en/investments/advisory-meetings/). Undertakings offering “financial training” do not do this!