A Friend & A Scam

MALAYSIANS aren’t lazy when it comes to their investments.

It’s just that financial products aren’t easy to understand. And when you don’t get it, you rely on consultants, Federation of Malaysian Consumers Associations secretary-general Datuk Paul Selvaraj offers.

“Making financial decisions is not something we do every day. Of course it’s intimidating. It’s not that consumers are lazy or aren’t bothered to know more, it’s just that they need to be taught financial literacy.”

Consumers must know how to get information and how to check what schemes are legal. It boils down to education, he thinks.

Describing the Employees Provident Fund (EPF) as safe, he cautions consumers against using their retirement savings to invest – unless they’re willing to take the risk and responsibility of doing so.

Lauding the EPF’s members investment scheme as a good option for consumers who want grow their money, he however, stresses that the “freedom” is a big burden loaded with risks.

“We hear so many stories of consumers getting scammed. There are those who have gotten high returns through the scheme but when you’re making investment decisions yourself, you have to shoulder a great responsibility.

“The EPF is only responsible for your money when you leave it in the fund. Be careful what you do with your EPF savings especially when you are reaching an age where you can no longer earn.”

Despite regulatory bodies stressing that it’s a big no-no, a finance manager who declines to be named, pre-signs unit trust documents for convenience and practicality.

The 38-year-old who participates in the members investment scheme, is satisfied with her investments’ performance. “My unit trust consultant was formerly in the finance line so she knows what she’s doing. Plus, she’s a friend and former colleague of my best friend. I wouldn’t pre-sign anything if it was a stranger.”

Because of her busy schedule, she thinks it’s more practical to leave it to the consultant to monitor the market, and switch funds if necessary.

Jen, a writer, 38, admits to letting relationships determine her investment decisions. She doesn’t know what products she has, but thinks it’s a lot.

“I keep investing in a new product every time a friend changes career to be a consultant. The phrase: ‘Please lah, can’t you support a friend?’ always gets me. I just don’t have the heart to say no,” she shrugs.

Asked why she doesn’t bother reading about the products, she says it’s too complicated.