Reply to Parliamentary Question on developing standards to assess the quality of financial and investment education
QUESTION NOS 1000
NOTICE PAPER 44 OF 2013
FOR WRITTEN ANSWER
Date: For Parliament Sitting on 6 February 2013
Name and Constituency of Member of Parliament
Mrs Lina Chiam, Non-Constituency MP
To ask the Prime Minister (a) whether a set of standards can be developed to assess the quality of financial and investment education being put out to the public in light of the proliferation of "get-rich-quick" courses typically advertised online; and (b) whether individuals seeking to teach financial topics such as forex, real estate and stock investment can be made to undergo some form of standardised assessment before being allowed to teach.
Answer by Mr Lawrence Wong, Acting Minister for Culture, Community and Youth on behalf of Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in Charge of MAS:
1 Mrs Lina Chiam’s question refers to training courses which typically claim to teach investment strategies that will give high and consistent profits within a short period of time.
2 There is a wide range of courses on investments available, from courses charting simple trends to those analyzing volatility. There are even those which associate stock market movements with movements of the stars. MAS is not in a position to assess exactly which courses are credible and will make money for consumers. It is also not meaningful to assess the trainers without considering the content of the courses conducted. Ultimately, consumers have to decide whether the course and the trainer can deliver on their promises. To help consumers, there are two things we intend to do more of.
3 First, limiting the scope for entities to mislead or deceive consumers through false advertising, which I mentioned in my response to Mr Teo on gold buy-back schemes. For courses on financial products in particular, MAS will review its regulatory framework to see how it can be tightened to enhance protection for consumers.
4 Second, educating consumers so they can ask the right questions. MAS has published, through its national financial education programme, MoneySENSE, a consumer alert on “Get-rich Quick Seminars” to highlight the key things that consumers should consider before parting with their monies to attend such training seminars. MAS will consider developing further guidance on what consumers should look out for when offered these types of courses, such as checking and verifying the qualifications of those providing the training.
5 I urge Singaporeans to be wary of promises of high returns that seem too good to be true. Whether they are purported investment schemes, training courses or other avenues for profit, they should be viewed with a dose of skepticism. Consumers should always ask themselves what the catch is.