By FIONA ROTHERHAM
Only a handful of financial advisers have signed up to sell Global-e Investments' e-bonds after two of four seminars held for brokers by the American-backed company.
The largest of the advisers, Money Managers, said it would supply the product on demand through its national network.
It would not recommend the bonds to clients, although it is an authorised broker.
Another adviser, from Whangarei, had his name listed on the company's web site as an authorised broker without his approval or desire. It was removed yesterday after the company was alerted to the error by the Business Herald.
Global-e is relying on the financial planning network to distribute the bonds. It needs a minimum subscription of 25,000 bonds at $US1060 ($2194) each by July 7 for the e-venture to proceed.
This would require investors to spend about $50 million in four months. No similar investment product has ever achieved such results in New Zealand.
The entire managed funds industry attracts between $200 million and $400 million in new investment each quarter.
But Global-e operating officer Philip Markwick is confident both the vital broker support and the high demand will eventuate.
"It is a big order but indications to date are that it will sell," he said.
Global-e said $200,000 worth of bonds had sold already. Many elderly investors were buying for their grandchildren.
Brokers spoken to after the seminar said it was styled on a razzmatazz public launch rather than a detailed financial briefing. No question time was allowed.
Auckland North Shore broker Gary Morgan said: "There was no information on how the money raised from the bond issue is actually going to be spent for this e-commerce venture."
The next two seminars, in Christchurch and Wellington today, will include time for questions.
Brokers likened the e-bonds to a flutter more than a serious investment. One called it an elaborate way to raise capital.
Brokers will be paid $US25 for each $US1060 e-bond sold.
Buyers will also be offered options for 300 shares at 5USc a share.
The bonds themselves represent only a 1 per cent a year return, which does not keep pace with inflation.
Daily prize draws will start once 25,000 bonds have been sold.
There will be a one-off draw of $US500,000, and then $US10,0000 a day rising to $US50,000 if all one million bonds sell.
One Auckland authorised broker, Jay Accounting & Tax, said it was not a very good product but clients would be better off investing in the e-bonds than spending their money on Lotto.
Spokesman Vijay Gupta said: "The chance of winning Lotto is around one in a million. Here the chance of winning a prize is one in 137."
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