This article is a community message by Financial Planning Association of Malaysia (FPAM), Johor Chapter (www.fpam.org.my). FPAM is a non-profit organisation which holds the licencing mark for CFPCERT TM Certification Programme in Malaysia. FPAM and IBFIM also partner to develop the Islamic Financial Planner (IFP®) certification programme to serve the Muslim community in accordance to Syariah requirement. If you need more information on financial literacy, please email: [email protected]
When it comes to investments, people may be wary at times, as there are just too many get-rich scams out there. According to an internet scam survey, Malaysia has actually become the most vulnerable country for internet scams in the region. Besides these scams, there are other investment scams such as the Ponzi or Pyramid schemes, Forex, Multi-Level-Marketing (MLM) and land scams that many have fallen prey to.
In view of this, the International Organisation of Securities Commissions (IOSCO) will hold the World Investor Week (WIW) from 2nd until 8th October 2017, to promote greater investor education and protection worldwide. This week-long campaign will highlight the various initiatives of securities regulators in these two critical areas.
Key messages outlined by the IOSCO for the investors are as follows:
- Verify that an investment professional is licensed
- Conduct research on a product before investing
- Assesses the impact of fees when choosing an investment
- Understand that risk exists in all investments
- Avoids “get rich quick” and “can’t lose” schemes
- Recognise the power of compound interest
- Recognise the importance of diversification
- Plan for and invest according to his/her future needs and goals
- Recognise the benefit of long-term, regular and diversified investment
Knowledge is Key
The best way to avoid scams is to equip yourself with the knowledge and skills in investing. Do your research and get advice from licensed financial professionals before going into any deals. You need to conduct as much due diligence as possible about the investment scheme you wish to invest in, especially the organisation and its people.
In conjunction with WIW, 4th October 2017 has been carved out as World Financial Planning Day (WFPD). Very few Malaysians are aware that financial planning is a profession regulated by Securities Commission of Malaysia (SC).
A Licensed Financial Planner will be able to help you crystalise your key life goals and help you plan how to achieve these goals. Investment is one of the common vehicles used.
If you have been approached by someone who claims to be a financial planner, you should ask if they are licensed by SC. At the same time, obtain the full name as in the National Registration Identity Card (NRIC) and verify if the licence is still valid.
To verify the license status of a professional/ organisation, you may visit the following sites:
Finally, a smart investor is one who is patient and realistic as he or she chooses the right financial product while keeping needs and goals in mind to earn optimal return on investment.