The behaviour of some financial planners is under investigation by the Financial Services Authority (FSA). This policy statement is following the large number of people who are victims of bad advice regarding investments recommended financial planners.
“FSA also asked that the financial planner shall inform the supervisory authorities of the products and / or services recommended,” said Kusumaningtuti S. Soetiono, Member of the Board of Commissioners (ADK) Financial Services Authority Field Education and Consumer Protection (EPK), in a release.
FSA underlines that financial planners must simply give an explanation on the benefits, costs and risks of the products and services in the financial services sector. That is, financial planners are not allowed to directly manage the funds belonging to the public.
“FSA prohibits financial planning acts as an investment manager. To be an investment manager must meet the requirements demanded by the FSA regulations,” continued Kusumaningtuti. For this reason, financial planners are encouraged by the FSA to enforce the code of ethics and corporate governance (good governance). This includes adequately analysing supported research in recommending a product and / or services to clients.
In addition, people also should understand that activities and financial transactions, among others, can be from investment, trading, underwriting, insurance protection, and the element of risks and costs in addition to the benefits offered.
The risk is higher if the product is issued by a company and / or committed by individuals who do not have these clear policies. The public can check by contacting the FSA on the telephone contact services (area code) 500-655.
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