Dennise Williams, Staff Reporter
SHIRLEY
"I DON'T care what you write. I would put more money with OLINT because the investment houses aren't doing anything for me," one disgruntled caller told Wednesday Business. In an email, another reader grumbled that neither the stock market nor the money market was showing any sign of vitality.
Since Wednesday Business first reported on the case of OLINT Corporation last week, readers have been giving us an earful about their feelings on the company and the financial sector in general. That company made news when on February 28 the Financial Services Commission raided the New Kingston offices and home of its developer, David Smith.
With millions of U.S. dollars invested, OLINT is said by some callers to now have 700 members consisting of both high net worth and average income Jamaicans.
The organisation is said to be an investment club that has been able to give returns to members averaging about 10 per cent per month. OLINT states that it does currency trading with a level of 'expertise' unmatched by the industry.
One offshoot of our coverage last week has been a large number of negative responses coming from the investing public about the service now being offered by much of the financial services industry. Wednesday Business asked the executives from the sector to address this issue.
WAKE-UP CALL?
Keith Duncan, president of the Jamaica Securities Dealers Association, said "The OLINT situation clearly shows that investors are willing to take a high risk for greater returns."
Sandra Shirley, president of First Global Financial Services, added "What you find is that when the returns are very high, the risk is very high. But what I say in this situation requires that the buyer beware."
So is this a wake-up call for the industry?
Mr. Duncan's response is, "What I think it shows is that the industry must create products to satisfy clients' needs. It shows that there is an opportunity to meet needs."
However, that is easier said than done, according to David Wan, general manager of Victoria Mutual Wealth Management.
"I agree that we need to seek out new products and innovate. But the main feature of the Jamaican market is that it is small. And so concepts such as short selling and derivatives that are popular in North America cannot happen in here because we don't have enough stocks to support it. I know that the Jamaica Stock Exchange is trying to get more companies to list and when that happens the variety of investment products could be expanded," he said.
To compound the problem, there is the challenge of expectations.
Ms. Shirley notes, "There is a danger that clients believe we are under-serving them. That is not true. We are not getting 10 per cent per month and paying them five per cent per annum."
Said Mr. Duncan, "Clients have become accustomed to high returns with little risk."
