Check whether a firm is licensed and whether MAS has flagged it.
Nadia keeps seeing the same ad in a social media feed. It's for a firm offering a managed portfolio with steady monthly returns of 2 percent a month (an invented example). Nadia has never heard of the firm, but it looks serious. Its website is polished and says it is "regulated", a licence number sits in small print at the bottom of every page, and a colleague says the colleague's cousin has invested.
A check of about ten minutes rules out many investment scams like this one. It uses two free tools on the website of the Monetary Authority of Singapore (MAS).
MAS regulates financial institutions that deal with the public in Singapore, including banks, insurers, fund managers and firms that deal in investments. It publishes two lists that matter to anyone offered an investment, and each answers a different question.
The Financial Institutions Directory answers this question: is this firm regulated by MAS, and for what? It lists MAS-regulated firms, the type of licence or status each holds, and the regulated activities each may carry out. A firm can be licensed for one activity, such as giving financial advice, but not for another, such as managing your money. An entry generally shows the firm's registered contact details as well.
The Investor Alert List answers a different question: has MAS flagged this name? It lists unregulated persons, meaning firms, websites and individuals that may have been wrongly thought to be licensed or authorised by MAS. MAS builds it from information it receives and states that it is not a complete list. Appearing on it is a strong warning.
A common mistake is to check only the Alert List, find nothing, and conclude the firm is safe. The Alert List only holds names MAS knows about and has added. A new scam firm, or one that renamed itself recently, will not be on it yet. Scammers launch new names constantly because their older names get listed. Absence from the Alert List is not proof of safety.
The useful test runs the other way. A firm offering you an investment should appear in the Directory, licensed for the specific activity it is offering. If it is not in the Directory, stop, whatever its website says about being regulated.
Run the check in this order:
Search the Directory for the firm's name, and try alternative spellings. If needed, search the Directory by licence type or by the activity the firm is offering. Confirm the firm is listed and licensed for the specific activity it is offering you. Search the Alert List for the firm's name and its website address.
Then read the two results together. If the firm is in the Directory for the right activity and not on the Alert List, you can move on to judging the investment itself. If it is not in the Directory, walk away, whether or not it is on the Alert List.
Nadia searched the Directory for the firm's name and found nothing, then tried a few alternative spellings and still found nothing. Next, Nadia searched the Directory by the activity the firm was offering, managing money, and found no firm with that name among the results. On the Alert List, the firm's website address was listed.
From the check, Nadia knew three things: the firm is not MAS-regulated, its claim to be regulated is false, and MAS has flagged it. The 2 percent a month offer needed no further thought.
You can still be caught out if you look up the wrong thing. MAS warns that scammers may impersonate MAS-regulated financial institutions to promote investments or solicit funds, often with unsolicited offers of high returns and little or no risk. Finding a real licensed firm under the ad's name only confirms that a real firm with that name exists. It does not confirm that you are dealing with that firm.
So check the details as well as the name. Compare the website address and phone number you were given with the ones in the Directory, or on the real firm's own website that you found yourself. Check the spelling of the web address letter by letter. If the details do not match, contact the real firm through its official channels and ask whether the offer, the person who contacted you and the app are theirs.
Passing both checks only means the firm is allowed to offer the service. It does not mean a particular product suits you or will make money, and licensed firms sell risky products too. Whether a product suits you is a separate decision from whether the firm is real, and you make it once the firm has passed.
The fastest way to get comfortable with these tools is to use them once on a firm you've actually seen advertised, before you need them for real. Pick one investment ad you have seen and run the firm through the Directory and the Alert List. Check its website address and phone number as well as its name.
Pick one firm you have seen advertised, look it up in both the MAS Financial Institutions Directory and the Investor Alert List, and write down what you find.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).