3 Easy Tips To Help You Avoid Getting Scammed When Investing

Always conduct thorough research before deciding to invest.

Cover image via @austindistel (Unsplash) & @executium (Unsplash)

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This Spotlight is sponsored by the Securities Commission Malaysia.

Did you know that at least 450,000 Digital Assets Exchanges (DAXs) accounts were opened in 2020?

If you're not sure what DAX is, it's an online business which allows investors to trade digital assets such as cryptocurrencies and digital tokens for other forms of currencies, including cash.  

Meanwhile, robo-advisor investment is on the rise too. According to the Securities Commission Malaysia (SC), 175,000 accounts were opened in 2020.

With the economic setbacks in the past year or so, more Malaysians, especially millennials, are looking for new ways to invest or diversify their portfolio, as investing may provide returns in the long-run.

Other than saving, investment is also becoming a more common method when it comes to building funds for retirement.

However, this also means that investment fraud is becoming a bigger issue, with inexperienced investors taking advice from unlicensed investment advisors or getting scammed by unregulated platforms

According to The Reporter, in 2020, the SC received complaints against 19 possible unlicensed investment advisors, compared to only 10 in 2019, which shows a 90% increase in just a year.

What's more shocking is that this year alone, there were complaints against 65 possible unlicensed investment advisors, which is a 242% increase. 

That's why it's important to conduct a thorough background check and research before deciding to invest. 

To help you avoid falling prey to scams and unlicensed investment advisors, check out a few tips shared by the SC:

1. Always conduct your own assessment before buying or selling any stocks
Whether it's about an investment advisor your friend has been raving about, or ads you've been seeing about a certain investment platform, it never hurts to do a background check to find out more. Look them up online, find out more about their investment schemes, or even get a second opinion.

2. Always check the SC's Investor Alert List before investing
The SC has compiled a list of unauthorised websites, investment products, companies, and individuals that investors should be wary of. If you're ever suspicious about an investment advisor or platform, you can check the list. Additionally, you can also contact the SC via phone at 03-62048999 or email at [email protected].

3. Be wary when investment advisors approach you via social media and private channels 
What should constitute as a major red flag to investors is when investment advisors promote their services via Facebook, Twitter, and Telegram. In most cases, they would require investors to pay a fee to join their private channel for more info and tips. The SC also shared that some of these operators post 'testimonials' from their existing subscribers to encourage victims to subscribe to their service.

At the end of the day, the SC is continuously reviewing the investment market and regulations, while also encouraging everyone to be vigilant when it comes to investing.

Additionally, to help Malaysians become informed investors in the market, the SC is kickstarting their annual InvestSmart Fest this month!

From 8 to 10 October, the InvestSmart Fest will educate the public about the various investment opportunities in the market, and how you can protect yourself against scams and dodgy investment schemes. 

Over the years, the InvestSmart Fest has been educating Malaysians about the investment market, and the important things every investor should look out for. This year, with the theme #JagaDiri and #JagaPelaburan, the annual event will be increasing awareness among investors to protect themselves and avoid getting scammed.

The best part about the InvestSmart Fest? Registration is free! 

Another great thing about the InvestSmart Fest is that you can also access a free online financial planning consultation

From 4 to 10 October, the SC will be conducting free #FinPlan4U sessions to help you plan your finances better. Most importantly, you can rest assured that these financial planners are licensed by the SC.

Here's what you need to know about the #FinPlan4U sessions:

- Complimentary 45-minute one-on-one session with a financial planner licensed by the SC
- Learn more about what a financial planner does and how to benefit from working with one
- Counselling sessions on financial management or on specific issues related to personal finances

Interested? You can book a spot here

Plus, the SC also launched a short video about financial planning. Watch the video below: 

Whether you're a new or experienced investor, you don't wanna miss out on the SC's InvestSmart Fest. Head over to their website to register today!

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