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Questions That Investors Should Ask...      (cont...)

9. Are there avenues for me to lodge complaints?

Hint: Always find out the avenues where you can voice out your grievances or lodge complaints. Your rights as investors are protected under the laws and you must enforce it. Ask your remisier about it.

Useful link: The importance of being a complainant

10. What is margin financing? What is the risk of investing using borrowed money?

Hint: Margin financing means you are buying shares using borrowed money. Investing in the stock market using margin financing is not for everybody because it is very risky. Ask your remisier to explain on the cost of financing and risks involved, and how much you stand to lose if the market goes down before using margin financing to trade. Margin financing is a major source of revenue for stockbroking companies and chances are it will be offered to you. Make sure you are absolutely sure of its risks before taking the offer.

Useful link: Margin financing

   

Your remisier has a duty to ensure that he or she only recommends investment products that are suitable for you. Under the rule known as “know your client”, they are expected to evaluate you and determine what is best for you. By asking questions, you can also give them an opportunity to know you better and enable them to recommend you the appropriate products.

At the same time, asking these questions would also enable you to evaluate the knowledge level of your remisier and see whether he or she is capable of providing value-added services beyond just taking orders.

 

Next month: What you should ask your unit trust agents.
 
  
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