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Whenever we are introduced to clients or groups who are submitting for participation in a private placement program for the first time, we find that they always have a burning anxiety to ask:

What are the returns?

In response most brokers (that probably have never successfully completed a transaction) start to talk about very high returns as an act of solicitation to entice the interest of the client. This is illegal. This is disliked by licensed asset managers and is only done by people that are inexperienced and have no personal track record. This is very dangerous and they probably have nothing to lose by behaving in this way as this might even be the first time that they are seeing a complete compliance package.

If you are ever in the situation that you are speaking with a party purported to be linked to a trade group, be highly cautious if they start telling you the returns prior to submission of documents and compliance approval. Please note:

Returns can only be discussed by licensed parties The returns are between principals and will not be disclosed to the brokers or on the open market Even historical figures can only be discussed after compliance as this is seen to be an act of solicitation

We normally present the opportunity to the client to start working with our group in a hope that we can contribute to the success of the long term goals of the client. We are all aware that the best things in life are built up steadily over time and not overnight.

One should note that there are several methods of transacting and different asset managers use their own preferred trading mechanisms. Clients should not ‘shop’ around for the highest ‘quoted return’; clients should focus on finding an asset management group which has:

Good reference from close associates A procedure that client in able to understand, accept and deliver comfortably An existing active programme will minimize delay of entry

Quite often what happens in this market sector is that brokers advertise procedure and returns that are not current or real. These attract the client to submit his details and the application is ‘shopped’ around the market to many parties. This has several detrimental effects, including the fact that the client is unhappy that he starts to receive calls and emails from a multitude of brokers who many never have performed for other clients. This causes distress and makes it difficult for the client to differentiate the real from the fake transactions.

Another problem which may occur is that the application package might be submitted to the same platform through two separate sources, in this scenario the platform may assume that the client is shopping around the market with multiple brokers and may refuse to work with the client. In turn, this causes further negativity, it:

Results in non-performance and causes a disbelief in the eyes of the client

Clients, as sophisticated investors, must understand each legitimate method of transacting and decide which one of these is most appropriate for their particular situation. Clients should not be bullied into working with large amounts, they should be able to start the transaction with an amount that they feel comfortable with.

Clients should decide on their chosen route in advance of this engagement as they have normally waited for years to meet a licensed asset management group. Please note that normally, if the client reaches contract stage and is not able to perform, that particular trade group will probably not deal with the client again.

In essence, clients should not focus or be dazzled by the dollar signs. One should focus on having a SAFE and SUCCESSFUL FIRST TRANSACTION.

For information on Private Placement Programs, Private Placement Investment, Private Placement Platform, PPP, MTN trading and MTN buy sell programs  visit www.sovereignsecurities.com

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