KUALA LUMPUR (May 17): The Securities Commission Malaysia (SC) has raised concerns that nearly one-third of Malaysians are at risk of falling victim to investment scams.
The SC’s study, which surveyed 1,302 individuals, underscores the urgent need for improved investment literacy at an early age, especially targeting individuals who are 18 years old and below.
“Investment literacy can be incorporated as part of extracurricular activities or out-of-classroom sessions for schools and universities,” the SC said in a report titled Understanding the Level of Vulnerability Towards Investment Scams and Readiness for Retirement Planning.
Regulators and financial institutions must also create or activate financial or ideation hubs towards providing better financial exposure, complemented by roadshows and events.
The SC also stressed the need to have more educational resources and tools to navigate the complexities of investment decisions.
"There are also possibilities to promote online and offline groups which create content to aid informed decisions by investors," the SC said. This is where a neutral third-party group has to create content, provide advice, and promote retail investments, it noted.
Vulnerable people have a common trait
Vulnerable people typically exhibit a 'common financial trait' that scammers could potentially exploit, according to the SC’s findings.
"Vulnerable investors often depend on third parties, such as family and friends, for investment advice, rather than relying on their own judgement, experience, or knowledge," the SC said.
Further, susceptible investors are also inclined to attend investment seminars, and may be easily persuaded to participate in investment schemes.
The SC also noted that investors with negative life experiences, such as financial difficulties, personal stress, or previous scam encounters, are more prone to fall for scams.
"For instance, victims who experienced a sudden or significant reduction in their finances to support their family would be pressured to find additional sources of income quickly," it added.