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Sunday 12 March 2023

Investors duped by fake mutual funds firm lose almost everything

The Star on Twitter: "Investors duped by fake mutual funds firm ...

KUALA LUMPUR: She wanted to grow her retirement nest, so she placed about RM500,000 with an agent to be invested in mutual funds.

“I trusted the agent because we had signed an agreement,” said the retiree who only wanted to be known as Lee.

ALSO READ: International investment scam syndicate mastermind remanded

It all seemed legitimate, she said, adding that all she wanted was to have a comfortable life in her twilight years.

But now, she wonders if she would ever see her money again. “The company I invested in cited the pandemic as the reason for not paying dividends to investors.”

Lee was among 105 victims who lodged police reports against the company at the Sentul district police headquarters here yesterday.

Another victim, Siti, said she had invested RM300,000 in 2019 after she was promised 30% returns in one year.

ALSO READ: Over 300 victims lose RM100mil to investment scam, police reports lodged against firm

She said that she felt assured when the agent cited names of VVIPs and prominent politicians.

“I did not know it was a scam because they showed me approval letters from government agencies.”

By 2020, Siti still had not received any dividends.

“When I tried to follow up on this, the company did not even respond to my queries,” she added.

In view of the silence, Siti said she approached the Malaysia International Humanitarian Organisation (MHO) where she discovered others in the same situation.

Another victim, a Yemeni national, said he was approached by a “relationship manager” of a supposed bank.

“The relationship manager convinced me that it was a good and safe investment with 10% guaranteed returns,” he said, adding that he invested RM330,000 in the scheme which involved sukuk and seafood.

MHO secretary-general Datuk Hishamuddin Hashim said the victims were involved in five types of investments offered by a marketing management company.

He said they were lured into putting their money into supposed trust funds, shares, and sukuk, among others.

These investors were promised that they would get profits ranging from 15% to 24%, depending on their capital and investment period, he told reporters yesterday.

MHO advisor Tan Sri Musa Hassan suggested the government draft a law to deal with fraud including stock investments to prevent more people from becoming victims.

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Monday 24 November 2014

Financial planning is all about investing

LOTS of people shy away from financial planning because they think they may be pressured into investing. And when you think investing, what comes to mind are horror stories of people who lost their life savings during the Asian financial crisis and Dot Com Bubble.

We hear tales of greed and chasing the hottest sexiest investment themes that has led them down the path of poverty and for some great debt due to leverage.

Admittedly, in the wealth management business, investments do form a large part of conversations that happen between ourselves and our clients.

For the most part, people speak to financial planners or wealth managers about how to make their money grow faster so they can meet their goals.

How much return can I get? What can I get if I invest in equities? How about properties? How can I start investing in currencies?

When people engage in a conversation about investments, inevitably, we get seduced by the quest to find the highest yielding asset. We steer into instruments we are not familiar with, drawn by the allure of high headline returns.

Think dotcoms. Think gold investments. Think land investments. Think bitcoin. Not necessarily bad investments but the basic concept of risk and diversification fall by the wayside as we chase returns.

But, step back for a moment.

Are you asking the right question? Is financial planning only about finding the next best investment?

While investing will likely play a key role in your financial plan, there are a lot more questions that need to be answered before you can choose the right investment, or if you even need to invest aggressively.

First question, how much do you need? Second question, when will you need it? Third question, how much have you set aside or are prepared to set aside? Last question, what returns are you going to get?

So say, I would like to buy a property in five years, of which I plan to make a downpayment of RM50,000. I have currently set aside RM10,000. I can currently save RM500 monthly.

Let’s assume I have no experience investing and decide to place it in fixed deposit at 3% per annum. Doing my maths, after five years, with interest compounded, all this adds up to only RM43,000. You are RM7,000 short.

In such an example, most people approach an adviser to find out what could yield them higher returns. In the above example, any misadventures in your investments could possibly set you back in your acquisition of your next property.

What if this was your children’s education? You may not want to risk your child entering university two years late. These are things your adviser needs to know as there other alternatives.

Financial management is very much about balancing between these four requirements. While getting higher returns so you can meet your goal is one way, it’s not the only way! You have other options. So, let’s go back to the four questions.

Firstly, you could buy a cheaper property with RM43,000. Alternatively, you could wait another year to purchase that property, giving you more time to save up. Or, you could increase your monthly savings to RM600 at 3% per annum. Lastly, consider investing in something that yields you 7% per annum. So, really, out of four options, only one is about investing.

For the most part, investing plays quite an essential role in most people’s portfolio. However, before you even have that discussion, think about the goals you want to achieve and whether investing is required and what kind of investment performance is needed.

By Ong Shi Jie

For the most part, investing plays quite an essential role in most people’s portfolio. However, before you even have that discussion, think about the goals you want to achieve and whether investing is required and what kind of investment performance is needed, says Ong.

Ong Shi Jie (CJ) is head of wealth management, OCBC Bank (M) Bhd.

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