SEC to investors: Understand investment products before committing resources

The Securities and Exchange Commission (SEC) has re-emphasised the need for all stakeholders in asset management and investment to be alive to their shared responsibility when it comes to investment decision making

Rev Daniel Ogbarmey Tetteh, the director general of the Securities and Exchange Commission has urged prospective investors to endeavour to understand products and returns promised by capital market investment companies before they venture into them especially collective investment schemes.

He urged investors not to fall prey to investments that offer some ridiculous returns that eventually turn out to be a mirage.

Rev Ogbarmey Tetteh was speaking at the launch of three products of a collective investment scheme by Tesah Capital.

He praised such schemes but cautioned prospective investors to clearly understand what they are going in for.

“You [investors], must seek to understand the [investment] products. Please don’t say that oh, my brother or my sister or my aunty says it is good and so I’m also committing resources, seek to understand the products. Where I sit as a regulator we get complaints especially around this time when all kinds of unscrupulous people are coming up with schemes to scam people.”

“And they’ll tell you that they’ll give you 10% every day, every week and some ridiculous offers. The issue is do you understand what they’re doing to be able to prompt you on those returns? You need to take time to understand but if you don’t do that and you get scammed then it means you’re shirking your responsibilities,” he stated.

He further noted that investment portfolios are shared responsibilities between fund managers and investors.

Rev Ogbarmey Tetteh also urged Tesah Capital as well as other market operators to be very professional in their dealings with clients.

“We expect market operators to live up to their fiduciary role because you’re dealing with what we call OPM [other people’s money] and there’s a way in which we expect you to behave. We have a compliance manual in which all market operators are supposed to work with. So, it is important that market operators live up to their fiduciary role.

“I want to also mention the role of professionalism because it is important for market operators and fund managers to be very professional when you’re doing your work.

“You cannot, for instance, invest the assets of a client or an asset owner in some vehicle that doesn’t match the risk profile of that particular client,” he added.

Nicholas Brown

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