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4 Things We Learned During Day 2 of InvestSmart Fest 2020

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The second day of the virtual InvestSmart Fest 2020 event saw another series of informative panel sessions, fireside chats, and presentations by a variety of key figures in various finance and investment industries.

Here are four things we learned during the second day of events:

1. Retail Investor Demand for Unit Trust Remains Encouraging

Loh Shih Rome (Head of Economic Research & Communications – Investment, Public Mutual Berhad) attributed the strong demand to several factors such as record low interest rates, the digitalisation of transactions which eliminates the need for physical meetings with agents, and positive growth in sectors such as ecommerce and healthcare.

This sentiment was echoed by Edwin Lim, chief marketing officer for UOB Asset Management Malaysia, saying that local retail investors have benefitted from the market rebound. This created a feel-good factor that encouraged further investment while also resulting in many newcomers becoming bolder in the market. However, with the majority of new retail investors having a positive initial experience, it remains to be seen what will happen during the next significant market dip.

2. Digital Investment Management Promotes Financial Inclusiveness

This session brought together three prominent figures in the industry – Wai Ken Wong (Country Manager – Malaysia, StashAway), Ronnie Tan (CEO, GAX MD) and Izzat Fadhli (Country Director, Wahed Invest Malaysia) to give an overview of digital investment management (DIM) in Malaysia.

A key aspect highlighted was that robo-advisors have democratised the investment process and ultimately promotes financial inclusiveness. This is due to the low barrier of entry as well as the ease of getting started, with only a smartphone needed for retail investors to gain exposure to various local and global markets.

They were also keen to highlight how the algorithms in robo-advisors ensure that there is no human emotion at play, giving investors the best chance of maximising returns gradually instead of trying to time market entries and exits. In short, DIM options are not meant to generate fast and easy profits, but rather should be used for gradual wealth accumulation.

3. Get Regular Updates From Your Financial Advisor

The session consisted of a presentation by Ahmad Nabil Nazri, the director of CFA Society Malaysia to educate investors about their rights when it comes to dealing with financial advisors (FA). He urged investors to consistently ask their FA about the products and services suggested and offered to them, while emphasising the rejection of hard selling.

While many who engage the services of FAs tend to trust them unconditionally, it makes sense to ask for periodic updates on their portfolio’s performance. However, he also advocates for investors to ensure that their FA has their best interests at heart, and are not just peddling more investment products. After all, why have a FA if you are not going to make the most of it?

4. Heavy Focus on Scams Suggests High Vulnerability

Many of the sessions had a heavy focus on scams and illegal investment schemes, with a significant amount of time dedicated to warning about the dangers as well as the importance of being educated. In his opening speech on day 1, Securities Commission Malaysia (SC) chairman, Datuk Syed Zaid Albar, announced that Malaysians have lost RM914 million to scams in the first half of 2020. So it is hardly surprising that many sessions have chosen to focus on education as a key pillar of their discussions.

The strong emphasis on scam prevention and financial education throughout suggests that the SC places huge importance on preventing retail investors from falling victim to such schemes. While the sheer amount of time dedicated across all sessions towards the topic may be weary to seasoned investors, newcomers will do well to heed the advice shared.

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 learned on day 1.

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