Where And How To Find Licensed Investment Advisors In Malaysia

The importance of investing for passive income cannot be overstated. For Malaysians, it has become more of a reality; with the younger generation who now understand how financial systems can make their money work for them.

There was a 30% increase in the opening of new local stock trading accounts in May of this year compared to the same period last year. Retail investor activity over the period also showed a 607% year-over-year increase.

The growing Malaysian interest in investing is great news, but it also comes with greater risk of scams. A recent survey also placed Malaysia among the 20 countries most affected by fraudulent calls. During the first half of 2020, the Securities Commission Malaysia (SC) had already issued several warnings about an increase in clone companies and unlicensed investment projects.

This year, SC’s InvestSmart® Fest is paying special attention to educating investors so they can avoid falling prey to these scams and illegal investment schemes.

We’ve all come across those so-called “investment gurus” on the internet who force their victims to send money in exchange for investment tips and tricks without checking first. So it’s important to know who you can turn to and learn how you can avoid falling prey to scams.

Who is authorized to give investment advice?

By law, not everyone is allowed to give investment advice. In Malaysia, it is a highly regulated profession under the Capital Markets and Services Act 2007 (CMSA). Basically, those who wish to give investment advice (i.e. provide securities reports, advice or analysis) must first be registered and licensed with the SC.

Whether your advisor provides formal analyst reports or shares investment advice on Facebook, all forms of investment advice are covered by Malaysian law outlined in the CMSA and are overseen by the SC.

All of the following types of financial advice require a license:

  • Securities trading
  • Trading of derivatives
  • Fund management
  • Treat in a private pension plan
  • Corporate finance consulting
  • Investment advice
  • Financial planning

Source: Malaysian Securities Commission

Avoiding the jargon, it just means that you need a license if you want to make money by teaching people how the markets behave and what to invest in.

Check if your Investment Advisor is licensed

Unauthorized investment advisers face up to 10 years in prison, a fine of up to RM 10 million, or both. To assist the public, the SC has publicly released the names and information of unauthorized investment advisers in Malaysia.

Just this simple step to doing a background check can save you the heartache of losing your money to crooks. Most types of investment programs in Malaysia require a license or appropriate registration with a government agency.

Keep the following points in mind before making an investment:

  • Check if your investment advisers or companies are licensed or registered
  • Request information / documents and check with SC, BNM, Ministry of Home Trade and Consumer Affairs, CyberSecurity Malaysia or Malaysia Business Commission
  • Don’t rush to make an investment
  • Be very careful with investment opportunities on social media platforms
  • Keep your personal information safe (MyKad, bank details, personal address)

Source: Malaysian Securities Commission

And most importantly to remember – do not hand over cash or transfer money to people’s personal bank accounts for investment purposes.

If you come across any unlicensed investment advisers, or those who operate illegal investment plans or platforms, contact the SC Consumers and Investors Office at + 603-6204 8999 or email: aduan @ seccom.com.my.

The number of online scams is on the rise, so investors should avoid being deceived in their search for yield in this low interest rate environment.

How do I find a licensed investment advisor?

The InvestSmart® Fest is the best place to start. This annual event aims to educate Malaysians to become informed investors – learn about the different investment opportunities in the capital market and understand how to protect yourself against investment scams and illegal investment schemes.

This year, the three-day event will take place from October 23 to 25, on the theme “Silap Labur Duit Lebur”. For the first time, the entire event will take place online; due to social distancing requirements set by the Conditional Movement Control Order in Selangor and Kuala Lumpur.

At Virtual InvestSmart® Fest 2020, you will be able to find information on how to start investing, how to spot financial scams, and even a showcase of products and services on offer in Malaysia. These services include stocks, bonds, mutual funds, private pension plans (PRS), exchange-traded funds (ETF), equity crowdfunding (ECF), peer-to-peer financing ( P2P), digital investment management (DIM) and digital assets. exchanges (DAX).

Over the past few months, digital investment managers have attracted many newbie investors with nearly 90,000 new accounts opened this year. Get expert insight on how this digital tool can add value and diversify your investment portfolio.

Participants also have a chance to win vouchers online via raffles and pop quizzes held throughout the event.

At this event, you can also get free financial management advice under # FinPlan4u. These sessions will be held online from October 19 to 25, 2020; with registration already open.

What you can get on # FinPlan4u:

  • Free 45-minute one-on-one session with a SC-approved financial planner
  • First-hand experience of what a financial planner does and how to benefit from their work
  • Counseling sessions on financial management or on specific questions related to personal finances

Going online makes this episode of the InvestSmart® Fest more accessible than ever. All you need to do is register and participate in the event from the comfort of your own home. Learn what you need to know about investing in Malaysia to avoid falling victim to the growing number of scammers looking to prey on the inexperienced.

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Jothi Venkat

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