@Omar @saad @Frhaann
I emailed Fair. They didnt include my original questions in the response bit basically I asked what you had suggested, namely where the dividend comes from investments, reconciling where loss could come into play, capital risk/ SIPC and liquidity/ withdrawal or penalties for withdrawal. Thoughts? This all sounds great (other than I’m not sure if backstop here is what I normally think of when talking about securities):
Thank you for reaching out to customer service, this email is a response to your Wealth Building Account (WBA) related inquiry.
The Wealth Building Account and the entire Fair program has been certified by a Shariah board, our gains are based on a basket of dividend paying assets, which can be operating companies, etc. We have a proprietary strategy that has been employed for 2 years now that has returned a steady rate with no changes. Can the rates change, yes, they could, but it would have to be a substantial event in the market to affect us. Also, based on our shared risk model, there is potential for gain for both you and Fair, but we protect the principal through SIPC insurance and backstopping the principal.
Fair also maintains a liquidity reserve on the monies held, so that they are available to you at any time and that allows for you to withdraw your funds whenever you wish maintaining principal protection. Members can withdraw 6 times per month from their WBA this is in accordance with the guidelines of savings and money market accounts. If you are moving from a savings vehicle more than 6 times a month, then you are not making gains and may need to be in our spending account.
Wealth building accounts are protected by SIPC insurance for Fair Invest, LLC. SIPC insurance covers customer claims up to $500,000, with a maximum of $250,000 for cash claims. For details, see www.sipc.org. Risk is mitigated and assumed by Fair Invest LLC, so members’ invested principal will not be impacted by such losses. For details, see Terms of Service | Fair