Hello Grasshoppa,

Recently, I received an announcement from Raiz that they will be exiting the Malaysian market. As of my writing, there has been no official announcement from the Malaysian entity, but by the time this post is published, they should have already shared their next steps & actions. This news isn’t very reassuring since it marks the second financial start-up company to announce its restructuring or closure in Malaysia, with HelloGold being the first. There may be other companies in a similar position that I am not yet aware of.

As an investor, I was quite excited about the concepts behind HelloGold & Raiz. These platforms focus on investing with minimal amounts and low fees, making it possible for many investors to start investing at a very low cost. This accessibility creates opportunities for Malaysians to begin investing without the barrier of high initial investments. Their monthly fees were also reasonable compared to traditional banks or investment platforms.

With two promising financial start-ups now restructuring or exiting Malaysia, this situation could lead to a loss of faith in other existing or new financial start-ups in the country. To be honest, I’m concerned about what will happen to my existing investments with other financial platforms. While I don’t have concrete evidence as to why these companies couldn’t survive, several potential issues come to mind. Are their fees too low to cover operating costs? Is the number of customers too low to sustain their business? Or perhaps Malaysians are not ready to embrace these new investment platforms & prefer traditional ones?

One reassuring aspect is that, despite these companies exiting Malaysia, they are regulated under Bank Negara Malaysia (BNM) & the Securities Commission Malaysia (SC). This regulation means that your deposits should be returned to you even if the company goes bankrupt. If you invest in companies not regulated by BNM or SC, there’s a high risk that you won’t get your deposit back if the company fails. Such unregulated companies often include investment scams like money games. In my past experience with HelloGold, I was able to retrieve my deposit; they allowed me to sell my gold & withdraw my money without issue.

These closures have taught me that I need to be more cautious when investing in financial start-up companies in the future. Although these situations haven’t greatly impacted me due to the regulatory protections, they have affected my overall investment plans. I typically diversify my investments across several platforms, so I now need to rethink my strategy. Since most of us invest for the long term, our current investments might not yet be profitable, meaning we could have to sell at a loss. Fortunately, I made a profit with both HelloGold & Raiz, so the impact on me has been minimal.

For any future investments, I recommend that all Malaysian investors exercise extra caution with these companies, even if they are regulated by BNM or SC, to prepare for similar situations in the future. Personally, I harbor no ill feelings towards either Raiz or HelloGold. They were truly excellent platforms that unfortunately could not sustain operations in Malaysia.

OSS!