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The National Consumer Service (Sernac) confirmed that he is targeting Happy and lined (FyF), an undertaking led by commercial engineer Gino Lorenzini and dedicated to financial advice, which is not registered with the Commission for the Financial Market (CMF).
In detail, the Service initiated an investigation of the firm for misleading advertising, which would be linked to the delivery of inaccurate data.
FyF would currently have at least 130 thousand subscribers, who pay approximately $ 2,000 per month for services.
Column titled “a cruel deception”
The foregoing took weight after the economist Salvador Palma published an opinion column in the newspaper La Tercera, accusing a “Cruel deception” by FyF, commenting on differences between reality and what the firm in question manifests.
In the opinion of the columnist, FyF pretends to be a “Modern Robin Hood” and that only his name “should arouse suspicion” by promising for “a modest $ 2,000 per month, the opportunity to ‘arbitrate’ the market through his suggestions.”
According to the economist, FyF’s market timing recommendations “Contradict all the academic evidence, bibliography and empirical exercises, which show that it is impossible to obtain consistently higher returns for each level of risk that an investor runs ”.
And the latter is precisely the promise of FyF: “higher returns than the AFP portfolios and with a lower level of risk”, added Palma.
The professional exemplified that the FyF reports “seem to support the results of their model. In the last of them they state: ‘In the last 11 months, since the social crisis 10/17/2019 … the profitability obtained by those who follow the recommendations is 14.09%, in circumstances that Provida fund A rented 4, 53% and fund E 3.46% ”.
Palma recalled in his column that the law establishes that the materialization of substantive changes is not instantaneous, “but that it occurs 4 business days after the change request date” and that, therefore, FyF would be giving imprecise suggestions.
But the most serious denounced by Palma in his La Tercera column is the following: he said that when making the correction, incorporating the t + 4 of lag between when the change order was issued and the moment when it actually materialized, “the effective return obtained since October 17 by those clients who followed the change suggestions it is radically different: 1.99% and not 14.09% as reported by FyF ”.
“Which means a difference in value for its clients of hundreds of millions of dollars in just 11 months”, the economist wrote.
Based on analysis, FyF’s suggestions would be inaccurate.
Faced with this scenario, the director of Sernac, Lucas del Villar, confirmed this Thursday an investigation in this regard plus the collection of various data to study the situation of this company.
FyF’s response to the Palma column
After the publication of the Palma column, FyF exposed its discharges through a publication on its social networks.
“(…) The publication issues false and biased information “the company said.
“As you know, FyF’s job is to reduce the risk of loss and, consequently, obtain a better return. It is important to talk about potential conflict of interest of this person, who could work for companies that invest or are shareholders of some AFP, so it would be convenient for them, as an interested party, to attack FyF “, FyF responded.
Next, the consulting firm said that Palma’s analysis “is biased, since it assumes the quota value of the fourth day to calculate the profitability, in circumstances in which the quota value that must be considered for the profitability calculation is the second business day” .
For the firm led by Lorenzini, what was stated by Salvador Palma falls into “A total ignorance about how the process of change of funds works (…)”.
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