Recently, there are investment training advertisements which claimed to offer "sure-win" investment techniques. Attendees to such courses should take extra care lest they get involved in a situation that resembles a dealing room more than a classroom. Some "instructors" may have strayed beyond their educational remit into offering investment advice without a licence.
Highlighted in the latest issue of CHOICE is an article alerting investors to beware of classrooms turned into dealing rooms.
Some short-term courses may last for just a few hours or a couple of days but cost for more than HK$10,000. There are also free seminars in securities trading luring investors to join pricey courses which promise quick profits.
In Hong Kong, licence from the Securities and Futures Commission (SFC) is not required for simply running a training institution or sharing general investment knowledge. Also, the law does not impose any ceiling of charges for such investment courses. Participants should be cautious that, if during class, the instructor digresses from imparting general investment knowledge to recommending specific stocks, or offers to deal on behalf of the trainees.
Simulated investing using a notional portfolio may be a useful way to learn, but trading real shares is beyond the scope of an investment course. Participants may be disappointed for not gaining any investment knowledge but suffering from financial losses.
To avoid paying for unlicensed investment advice, investors should take note of the following:
- Check the Public Register of Licensed Persons and Registered Institutions in the SFC website (www.sfc.hk) to verify the status of the educational institutions or instructors.
- Check the licensed institutions or instructors what types of SFC regulated activities they are permitted to carry on.
- Check other relevant information: whether the licence is still valid; whether the licensee has had any disciplinary record; and whether the institution came under a different name before.
Investors should not rely on tips from the investment advisors. Investing is all about doing homework - understand one's financial needs, know the risks of different types of investment products and assess if the products meet one's own objectives.
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