My comments on Go Markets may already have been made somewhere in the past 65 pages, in which case I apologize.
It has taken me quite a few years to realize the truth of the first rule of investing (not that I put forex in that light!), namely
protect your capital (or at least as much as you can).
This should include wading through the 100 or so pages of
fine print information that all Australian licensees need to provide to people they intend taking money from. If you don't like the rules, you don't invest.
You also need to be satisfied with the organization itself, particularly its own financial position. I know all these companies are audited but I prefer to see reports with my own two eyes or, at the very least, to know that there is a very Big Brother in the background. Nearly every website includes a section called
About Us. The more information the better.
How much can you learn about Go Markets from their website? Zilch, except they hold an Australian Financial Services License. On a scale of 1 to 10, I give that about a 3, and that is not a tongue-in-cheek comment. For non-Australians, try googling Opus Prime or Storm Financial (and those two are just for starters)! They had AFS licenses, yet collectively their clients have lost hundreds of $m.
Whenever any company, either in Australia or elsewhere, appears to lay primary emphasis on saying they have the relevant licenses I become cautious. I EXPECT them to have the correct licenses. I need that fact confirmed but I don't want it to appear to be the most important issue. I want to know about their financial strength, the director's background (without the BS), past companies they have run, insurances they carry etc. To the GM owners I say, lay more of your cards on the table. I will give you more respect for it.
For readers' information, I have spent the $15 or so to look at their most recent
company extract on the ASIC database. (For those that live outside Australia, that's the Australian Securities & Investment Commission, the government regulator.) For what it is worth GM has two directors (age 44 & 36) and a paid-up capital of just over AUD$1m. (That is about USD$800,000, an amount somewhat short of the $20m required for a US Brokerage firm.)
Their last financial report was lodged on 15 March 2010, with the company shown as a "Small Proprietary Company that is controlled by a Foreign Company". That ultimate holding company is fully stated (in the
official ASIC records) as
Go Financial Group Private Limited, which holds all the shares. What seems strange to me is that a google search on this latter company (which effectively controls the forex assets of all GM customers) has not a single complete world-wide match. Nor could I find it on either the NZ or UK company registers, the countries where the two directors were born. Perhaps it is not strange at all, but you can see how some more open detail on their website (in the About Us section) could have avoided any surprise/query on my part.
It is most unlikely that I will become a GM customer anytime soon so I have not delved into the company as far as I would like. Someone, with
more skin in the game, could pay to obtain the 36 page Financial Report lodged with ASIC on 15 March.
All forums are littered with comments from people who say they don't want to have their hard-earned capital lost by a Broker default (and I am certainly not suggesting that in the present case), yet I wonder how many have bothered to go past the information given to them on a few broker web pages before sending off their cheque. (That's check for many of you!)
Hopefully some more control for participants in the Australian market is not too far away. Just a few days ago, the ASIC Chairman spoke at a major conference dealing with the "impacts of proposed regulatory reforms on unregulated or ‘less-regulated’ market segments". Everyone transacting in the spot forex market and this includes the coy owners like GM should breathe easier if the rules become a bit more transparent.
Cheers
PS If anything above is unclear, pls blame my son.