The pandemic lockdown measures had spurred retail investor interest in stock markets worldwide. While the retail investors’ sentiment towards stock markets is high, some of them are first-time investors or inexperienced stock investors. Where do they source the information from? There’s a surge in investment advisors on social media and even forums such as the famous r/WallStreetBets on Reddit 

Locally, the legitimate investment advice was given by the stockbroking firm’s registered and licensed advisers or brokers. However, truth be told, investment advice comes from everywhere, from the Kopitiam of the neighborhood, uncles and aunties during gatherings to the investment advice on Facebook pages, Reddit and Telegram Groups. But are they legitimate?

Securities Commission (SC) Malaysia had warned against individuals offering investment advice as a business without a license. This is an offense under the Capital Markets and Services Act 2007 (CMSA) is punishable with a fine not exceeding RM10 million or imprisonment not exceeding 10 years or both if found guilty.

Public retail investors should avoid dealing with these unlicensed investment advisers to prevent being defrauded or used as a tool in their market manipulation scheme. Investors could verify the licensing status of the stock-broking platforms, companies, and advisers they rely on through the official SC website. Here’s where to check for Public Register of License Holders and List of Registered Recognised Market Operators. 

As there are more unlicensed investment advisers are giving stock recommendations and investment advice for a fee, investors must be more careful with these schemes. As a prudent investor, remember to check the licensing status of any investment advisers before dealing with them.