It is quite common for people to be approach to invest in certain "too-good-to-be-true" investments. Very often, due to greed many people will invest their hard earn money into it only realising that it is a scam. MAS stand is quite clear that investors should only deal with regulated persons. Otherwise investors have no protection from the various provisions of the law administered by the MAS. The details can be read from these two links: Investors Alert List and Pitfalls in Dealing with Unregulated Persons. My comments:

Some investment products are not even defined as "investment products" and hence are unregulated. Does it mean it is automatically a scam? I don't think so.

Second, some regulated persons like exempt financial advisers and licensed financial advisers are selling these unregulated products. So we have regulated persons selling unregulated products. If a careful investor, on heeding MAS advice to deal with regulated persons, buys an unregulated product from this person which turns out to be a scam, will the investor enjoy the protection from the law? I don't think so. This is because certain unregulated products remains unregulated because it is viewed as not an "investment product."

With the rapid development and advancement of the financial markets, from what I see it becomes more and more difficult to "regulate" investment products. For example - a registered unit trusts can be a regulated product but the fund manager demostrate no real skill but instead made massive losses much greater than the market losses. This is an example that a regulated product is not much different from a scam. On the other hand, there can be geniue investement opportunity that is unregulated but is not a scam (I cannot give an example here for obvious reasons).

As mentioned before, I felt that there should be more regulations on financial advisers and practically more enforcement on them. Let the onus of identifying whether a product is a scam or not lies with the financial adviser. If this burden is placed on them, many salesman will quit the industry (because they have no capacility to do analytical studies on the products they sell)  but many more analytical advisers will join the industry since their logical skills, reasoning skills and perhaps academic capability will be put to better use when recommending investment products.

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