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4 Things We Learned During Day 1 of InvestSmart Fest 2020

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InvestSmart Fest is the Securities Commission Malaysia (SC) flagship investor education event, with this year’s three-day event being held virtually for the first time. The event has drawn over 5,000 participants so far and is aimed at providing opportunities for Malaysians to learn how to improve their financial health through a series of presentations, fireside chats and panel sessions involving industry experts.

Here are four things we learned during the first day of this year’s event:

1. Malaysians Have Lost RM914 million to Scams in 2020

According to SC chairman, Datuk Syed Zaid Albar, Malaysians have lost RM914 million to scams in the first six months of 2020 alone. In recent times, there has been a substantial increase of clone firm scams, where investors are tricked into investing with companies disguised as legitimate firms.

He also shared that an internal taskforce has been recently set up by the SC to carry out investigations and take action against the masterminds behind such schemes. One can only hope that this will help to reduce the number of people falling victims to these scams.

2. Unrealistic Expectations Increase Vulnerability

He attributed the vulnerability of victims to unrealistic expectations, with an SC survey earlier this year revealing that the majority of Malaysian investors expect 24-30% returns per annum on their investments. The survey also showed that Malaysians tend to put off financial planning for the future, and only start planning for their retirement at 44 years of age.

With many vulnerable individuals looking for ways to increase their wealth quickly, it comes as no surprise that there has been a sharp increase of illegal investment schemes popping up. Up until the end of September 2020, the SC received 370 queries and complaints about such schemes, compared to 317 for the whole of 2019.

3. Women-Run Crowdfunding Campaigns Have A 100% Success Rate

The first session of the day also proved to be one of the most popular. The fireside chat featured prominent figures in the peer-to-peer (P2P) and equity crowdfunding (ECF) investment industries, including Chai Kien Poon (Head, Strategic Investors, Funding Societies Malaysia), Angelld Quah (Co-founder, FundedByMe Malaysia), Matthew Fernandez (COO, microLEAP), and Kashminder Singh (Co-founder, pitchIN).

During the session, an interesting revelation revealed by Quah was that crowdfunding campaigns for women-run businesses on FundedByMe have a 100% success rate. While it is unlikely that this figure will be sustained forever, it certainly highlights the potential of empowered female entrepreneurs in Malaysia!

4. Bursa Malaysia is Taking an Active Approach to Education

With the COVID-19 pandemic driving a new wave of retail investors into the stock market, Bursa Malaysia wants to ensure that newcomers are fully educated about the risks involved in investing. In June, they launched the Bursa Academy, a comprehensive e-learning platform to help educate retail investors and provide a continuous and holistic learning journey.

“The platform provides investors with a wealth of information and tools to learn how to navigate and enjoy returns from the capital market,” said A.A. Deepa, senior vice-president of Investor Education & Channel Management at Bursa Malaysia.

As of September, close to 92,000 users have already accessed the portal. This is an encouraging sign and suggests that people are keen to learn more about investments. Hopefully, this will be one of many steps to combat the constant proliferation of illegal investment schemes and scams in Malaysia.

If you missed any of the panel sessions or presentations, you can catch up by watching the recorded videos on their YouTube channel.

Here’s what we learnt on day 2 and day 3.

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