Ghana’s level of financial literacy was called into question recently following the banking sector cleanup; and the consequent MenzGold, DKM and God is Love Ponzi schemes saga.
Many are those who have attributed the situation to lack of financial knowledge among the citizenry. Due to this, an Investment Banker and Chief Executive Officer of EcoCapital Investment Management Limited, Mr Dela Agbo, has advised the investing public in the country to learn about investments firms they transact business with. This will help them make more prudent investment decisions while protecting their monies.
He says seeking knowledge about how the investment market works from investment bankers or brokers will help save one from falling prey to Ponzi or bad investment schemes which often lead to loss of funds.
He therefore advised the investing public to identify a licensed investment bank and establish a meaningful relationship with them.
This, he says, will help investors in the country to tell the difference between a good investment bank and a bad one.
Having established the relationship, he also advised the investing public to take keen interest in tracking the trajectory of their investments.
“Don’t just put your money with an investment bank and go to sleep. What I have noticed is that a lot of Ghanaians buy shares, buy mutual funds, do transactions with the broker and they go to sleep. So, truly no one advises them.
“So, it’s very important that you build a relationship with an investment banker, stay in touch, ask them questions”, he said.
Mr Agbo made these remarks during a recent interview with Ghana Talks Business in Accra.
Licenses of 53 investment banks revoked last year
The Securities and Exchange Commission (SEC), in November last year, revoked the license of 53 fund management companies who fell short of regulatory requirements. The Commission made the following comments regarding the situation.
“Essentially, they have failed to perform their functions efficiently, honestly and fairly and in some cases are in continuing breach of the requirements under relevant securities laws, rules or conditions, despite opportunities provided to them by the SEC within a reasonable period of time to resolve all regulatory breaches,” said the SEC on Friday, November 8, 2019.
This, Mr Agbo believes, should serve as an eye opener to the investing public of the need to learn more about investment firms and establish relationships with licensed institutions and their personnel.