In a TikTok video, a young man can be seen exiting a luxury car while holding a designer bag. In the video caption, he says that in the year 2025, more people have the potential to be millionaires.
“For those who want to be a millionaire, click on the link in bio to learn how to be a financial trader for free,” he adds.
The link in the bio will lead users to a Telegram channel where he says that viewers can become successful traders by investing at least US$100 (RM443) to earn more than US$2,000 (RM8,866) in return through an online platform. He claims that the profit will be transferred into their account in less than two days.
Then he says that he will take a cut of up to 20% from each successful investment.
In another video, a self-proclaimed trader with hundreds of thousands of followers shares that users only need US$100 to start trading and achieve ‘financial freedom’. She recommends a specific broker trading app.
However, a check by LifestyleTech revealed that the recommended platform has been flagged by the Securities Commission under its Investor Alert List in 2024 for “carrying on unlicensed capital market trading activities of dealing in securities”.
Investors are advised not to deal or engage with entities that have been marked under the Alert List as they will not be protected under Malaysia’s securities law.
Caution advised
When videos by an influencer or content creator touting investment advice or platform appear on users’ feeds, Federation of Malaysian Consumers Association (Fomca) deputy president Datuk Paul Selvaraj hopes that users will just keep scrolling away.
“These videos are designed to lure users into potentially fraudulent investment schemes by making unrealistic promises of high profits,” he says.
Paul says Fomca has received complaints from consumers who claimed to have been duped into investment schemes promoted by content creators who sometimes style themselves as ‘financial influencers’ or finfluencers.
Typically, these content creators present themselves as individuals living an affluent lifestyle with luxury cars, designer items and huge amounts of cash to flaunt around town on shopping sprees. For users who ask “How can I be like you...”, the creator will tell them to join a trading class or session through Telegram, claiming that they’ll see quick returns from their investments.
“The people who have lost their money in these schemes come here feeling upset and hope that we can do something to help them get their money back.
“But when they have already transferred the money out of their account, it’s too late. We can only advise them to make a police report and help them to come to terms with the financial loss,” he says.
When it comes to investment advice from the likes of such content creators, Paul says users should be more wary about possible motives behind such content.
“That advice may not be genuine because it’s possible that they have been sponsored (to promote a product or service in the video) or have their own agenda that could lead to devastating consequences for investors,” he adds.
Growing interest
The Securities Commission is stepping up to protect investors from potentially fraudulent investment schemes promoted by content creators on social media.
In July 2024, the SC updated its Guidance Note on the Provision of Investment Advice to address the growing popularity of financial influencers or finfluencers in promoting capital market products and services.
“While finfluencers can help enhance financial literacy, the SC has also seen a rise in the number of cases involving misleading investment promotions, scams, and unlicensed activities,” the SC says in a statement to LifestyleTech.
The SC says it received 4,859 complaints and enquiries on such activities in 2024, a 49% increase from 2023.
“These include 77 cases related to unlicensed investment advice – a 250% increase from 22 cases in 2023,” it says.
It has also detected 796 URLs – compared to 569 in 2023 – linked to possible scams and unlicensed activities, with 84 related to unlicensed investment advice.
“These concerns prompted the issuance of the Guidance Note to help protect investors and promote responsible financial advice,” the SC says, adding that the update is meant to clarify its stance on finfluencers, ensuring that sharing financial insights or advice on social media is treated the same as regulated investment activities under securities laws.
The five-page Guidance Note highlights that promoting capital market products such as unit trust funds, cryptocurrencies or trading platforms on social media may require an SC licence, especially if financial insights or recommendations are shared with the expectation of commissions or rewards.
It states “generally, talking or sharing factual information about an investment product or towards educating the followers (as opposed to advising) would not likely require a licence from the SC”.
However, the SC is most likely to consider any sharing as an investment advice if it involves “the provision of recommendation or opinion which may induce your followers or any person who comes across your content to take an action” – for example to buy, sell or hold – regarding those funds.
“Finfluencers who wish to continue providing investment advice in Malaysia are encouraged to obtain an SC licence. They should contact the SC for inquiries on the licensing framework,” it says.
Serious repercussions
Finfluencers should take note that engaging in unlicensed regulated activities is an offence which is punishable under the Capital Markets and Services Act 2007 (CMSA). Any person found guilty may be liable to a fine not exceeding RM10mil or imprisonment not exceeding 10 years or both, says the SC.
The SC adds that a revised version of its Guidelines on Advertising for Capital Market Products and Related Services will come into effect on Nov 1.
“The Guidelines was revised to update certain requirements and guidance taking into account advertising and promotional trends globally and domestically, including the growing prominence of social media and financial influencers (finfluencers),” it says in a March 27 release.
Finfluencers who voluntarily promote capital market products or services will be treated as advertisers under the Guidelines and held accountable for their promotional content. The SC has also tightened requirements for advertisers, making them responsible for ensuring their appointed marketing agents adhere to the Guidelines.
The 22-page Guidelines state that advertisements regarding a capital market product or capital market-related service must be clear, accurate and balanced in its messaging. It cannot contain any exaggerated messaging that is likely to mislead investors.
Advertisers must always treat investors fairly and not exploit their vulnerabilities, including financial status or lack of expertise. They are also required to disclose hidden fees and charges of the service/product featured, it states.
“The Guidelines will also impose a prohibition against advertising services in Malaysia, of persons who are not authorised by the SC,” it adds in the statement.
Seeing ‘red flags’
The SC says it has also strengthened its monitoring and surveillance of unlicensed activities on digital platforms. Some proactive measures include early intervention to add offenders to its Investor Alert List and initiatives to get potentially fraudulent websites and social media accounts blocked, where the efforts are “carried out in close collaboration with Malaysian Communications and Multimedia Commission (MCMC)”.
It also takes enforcement action when necessary.
“Notably, the SC issued reprimands to five unlicensed investment advisors, pursuant to Section 354(3) of the Capital Market Services Act, resulting in RM9,140,000 in penalties between 2022 and 2023,” it adds.
It also gathers information on scam and unlicensed activities through public feedback from its Aduan Channel. Investors are urged to spot possible scams through its T.I.P.U. formula where T stands for “Tidak akan rugi” (guaranteed no losses), I for “Indah khabar dari rupa” (too good to be true), P for “Peluang hanya sekali” (limited-time offers), and U for “Untung besar” (unrealistically high returns).
“Other scam tactics include promotions via social media ads, redirection to WhatsApp/Telegram, fake regulatory documents, and the use of company mule bank accounts to disguise illicit activities.
“Recent trends include deepfake videos impersonating public figures and pre-IPO scams,” it adds.
The SC also encourages investors to verify entities through the InvestSmart portal and only deal with licensed professionals.
However, Paul says people may shy away from professionals due to concerns about the cost.
“In my opinion, registered financial advisers are completely underutilised. They need to be upfront about the cost (to engage them) and make it easier for people to reach out. However, people don’t go to them simply because they don’t know how much it’s going to cost them,” he adds.
Treating financial illiteracy
According to Dr Adam Zubir, the minimum cost of engaging the service of a licensed financial planner may be around RM5,000. As someone who has undergone training and certification courses to become a licensed financial planner, Dr Adam is aware of the dos and don’ts when it comes to advising his clients on investments.
“For example, I won’t tell someone to transfer money to my personal account for investment purposes. I also can’t say invest RM500 now to get RM10,000 in return. That’s a scam! I can offer financial advice but it has to be after I’ve carefully studied the market condition.
“I will advise them on how to diversify their investment portfolio and also remind them of the possible risks at the same time. They have to make the decision on their own,” he says when contacted by LifestyleTech.
He admits that most people are reluctant to seek the services of a licensed financial planner due to the cost, and that most may also have misconceptions about their role assuming they are insurance agents instead.
“They don’t want to pay to seek professional help which is why they’d rather take advice or tips found on social media or family members. I would encourage people to spend money learning how to manage their finances from a professional so they can protect their wealth,” he adds.
Dr Adam was a medical doctor in the UK before coming back to Malaysia to start a career in financial planning. Now, he styles himself as Doktor Kewangan on social media, where his channel on TikTok has amassed over 370,000 followers.
“Basically, I want to treat financial illiteracy. I’ve seen what happens when people manage their finances badly from my personal experience. It has also been frustrating to see people continuously fall for investment scams promoted by some individuals on social media,” he says.
Before anyone starts investing in any scheme they may have seen on social media, Dr Adam says to please check whether the entity or individual is registered with the SC first.
“You should also see if they have been listed in the Investor Alert List. Secondly: never transfer investment funds into a personal bank account. It could be a mule account. Lastly, please learn about investments first – the risks, rewards and why nothing in this world can turn RM500 into RM10,000 in a short amount of time,” he says.
