Question:

I have been approached by a company called Winston Pride & Associates which is listed with the Australian Securities & Investments Commission.

But I am, of course, wary because I have to pay upfront for a service of tips on horse racing which they say their system can identify. They say they will refund my money if I don't get the success they promise, but won't put that in writing until I get the receipt. Have you heard anything about this company, and how difficult is it to get on the ASIC register?

Answer:

Mary Holm: Your first four words say it all - or at least most of it. The company approached you, presumably by phone, email or mail. That's not a good sign.

I would be interested to hear from any reader who has gone into an investment after a direct approach from a company they didn't know, and has been happy with the outcome. Please write and tell me about it.

Another warning sign is, as you note, the company's reluctance to put its guarantee in writing. Even if it were written, we couldn't be certain they would honour their promise. It's amazing how easily some companies wriggle out of such commitments - or simply don't respond or disappear.

Nor does their spelling of the "racong" industry in the brief introduction on their website inspire confidence.

Finally, and perhaps most importantly, think about what they are apparently offering. If they really knew which horses were going to win, why wouldn't they simply make their money on the gee-gees, rather than by selling their secrets to you?

In answer to your questions, no, I've never heard of the company. The Australian Securities & Investments Commission (ASIC) does confirm it's registered with them, but that doesn't amount to much.

"When a company is registered under the Corporations Act 2001 it is automatically registered as an Australian company. This means that it can conduct business throughout Australia without needing to register in individual State and Territory jurisdictions," says an ASIC spokesperson. She adds: "We cannot provide any comments as to whether your reader should or should not do business" with Winston Pride.

That's because ASIC doesn't make any judgment about the quality of registered companies' business. When you think about it, it can't, and nor can any New Zealand government agency.

It would take heaps of taxpayer-supported resources to look into every business in enough depth to pass judgment. Even then, where should an agency draw the line? A risky business is not necessarily a bad one, as long as everyone understands the risk.

In this case, though, something tells me you are probably not on to a winner. Give it a miss.

Mary Holm is the author of bestselling books on KiwiSaver and personal finance. She is also a highly praised seminar presenter. Her written advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following that advice.