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

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

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

Subscribers are initially given information through various channels, in particular videos and apps. Some of the tips that are 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 frequently used in this context.

Trading in such products is often presented in such a way that it was previously only possible for the very wealthy and for banks to do so to increase their wealth, and that access is now being made possible to this method of easily accumulating money for ordinary citizens – and that they just need the corresponding partner to do so.

They do not check the subscriber’s financial situation and do not provide recommendations based on the knowledge and financial position of the customer. 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 loss.

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