Be careful, beware of unlicensed investment advisers

OF late, there has been a slew of so-called financial experts offering tips and advice on how to make money.

Smartly dresses men and women of all races feature themselves on TikTok and YouTube videos claiming to be financial gurus in stock market trading.

They talk about "buying low” and "selling high" and other financial jargons such as selling pressure, resistant level and the psychological resistant level.

There are also so-called financial stalwarts lecturing potential investors on the pitfalls and potentials of bitcoins, crypto-currencies and non-fungible tokens.

"Invest in stock market trading and make returns of 30 percent compared to fixed deposits," said one so-called guru.

All these mumbo-jumbos are alien to the rakyat.

But above all, can all these so-called financial wizards be trusted?

All investment advisers must be licensed

The Securities Commission has warned that any individual conducting a business of offering investment advice without a licence is an offence.

The offence under the Capital Markets and Services Act 2007 (CMSA) is punishable with a fine not exceeding RM10 million or imprisonment not exceeding 10 years or both, if found guilty.

The regulator has cautioned members of the public against dealing with unlicensed investment advisers, as they could be defrauded or used as part of a market manipulation scheme.

Unlicensed advisers cannot make stock calls

These so-called stock market tutors cannot make stock calls in their so-called investment seminars.

What this means is that a guru can share with investors on what Bursa Malaysia is all about.

"A tutor can share with the student general information about the stock market such as what is a CDS account and how to buy a stock.

"The adviser can offer general information but cannot give recommendations on which stock to buy such as buy stock A and sell stock B.

"Only a licensed stock market trader can make stock calls," a source at the Securities Commission told DagangNews.com.

Unlicensed investment advisers cannot accept money deposits

Malaysian investors should know that deposit taking is against the law and they should not be duped by these so-called money gurus.

Under Section 137(1) of the Financial Services Act, it is an offence for any person to accept deposits without a licence.

Subsequently, investigations for money laundering will also be undertaken under the Anti-money Laundering Act.

Any budding Malaysians who wish to make it big in the stock market should not be gullible by parting with their hard-earned money to pay deposit to their so-called "remisiers."

Be wary of stock market seminars

Malaysians must also be wary of online or physical classes or seminars offering lessons in stock market trading.

The so-called advisers would sweet talk investors in parting with their cash to learn how to make more money on Bursa Malaysia.

Some would cajole eager beavers to invest as much as RM50,000 of their hard-earned savings into the money markets.

This RM50,000 will then be invested in the stock market by these unlicensed advisers claiming they can make returns of up to 30 percent or more.

Perhaps the rakyat should learn that it is not easy to make handsome profits so easily and so quick.

"These so-called investment advisers actually sell pax at the seminar at hotels rather than teach about the stock market.

If they charge RM300 per pax and the stock market seminar is participated by 20 people, they make easy money of RM6,000 in a two-day seminar selling financial jargons.

At the end of the day, the participant still does not understand what short selling is and has not even started trading," trader NurHamidy Yusoff told DagangNews.com.

Be patient and take baby steps. Business tycoon Tan Sri Mokhtar Al.-Bukhary started his business empire by trading cows for beef. The rest as they say is history.

Investing in bonafide investment firms is the best

Perhaps, it is best for Malaysians to just invest their savings in bonafide investment houses.

They include CIMB Investment, Maybank Investment, Rakuten, Public Mutual, Amanah Saham Nasional and other bonafide financial services group.

These entities have qualified investment advisers with decades of experience between them.

So think before investing. Ask for their licenses and don't be duped by their sweet promises of too good to be true investment returns. – DagangNews.com