Vaughan de Kirby, a broker registered with the Financial Industry Regulatory Authority (Finra) and an immigration attorney who works with EB-5 investors, says associating with a broker-dealer who works in the EB-5 market is one way for an advisor to break into this niche.
“We’ve represented more than 1,000 clients who have invested in EB-5 projects and they did OK,” de Kirby says. “But there have been abuses where money was moved from job-creating projects to non-job creating projects.”
Investors frequently make low returns on their investments, but they are satisfied because the real goal is to obtain the green card, he says.
But that is an important reason why they need investment protection, adds Gibson. “If something goes wrong with a project, the future of not only the investor but his or her family is in jeopardy, because their goal is to come to the United States. They may be fleeing persecution.”
Kurt Nunez, a compliance consultant with Core Compliance & Legal Services in San Diego, has extensive experience dealing with EB-5 investors and says the ones he has dealt with in the San Diego area have relocated and are doing well.
“But there are not many broker-dealers or financial advisors in this market to help them and it is difficult for an advisor to start from scratch,” Nunez says. “This can be a lucrative business model for those who are willing to stay on top of the regulations and research the projects.”