The cruel nature with which the financial sector clean up was conducted has left in its wake challenges that even the regulator seem overwhelmed to adequately resolve.
It will be recalled that the financial sector mess was complicated because all the financial institutions did business with one another and therefore the blantant use of the same formula to apply to all the institutions was absolutely wrong.
It created further problems for other financial houses which have yet to be resolved.
In the wake of the reforms carried out by Bank of Ghana, KPMG, an auditing giant, carried out a survey into the financial sector.
The revelations from the survey indicated that seventy-one (71%) percent of Ghanaians will rather deal with the Banks than with Fund Management Companies. In fact only fourteen percent will consider depositing with Fund Management Companies.
This is very instructive in that Bank of Ghana has settled all depositors who invested with the defunct banks.
The Securities and Exchange Commission has not comprehensively dealt with payments of aggrieved clients as at today, this is nearly one year after revocation of licenses of Fund Management Companies.
In fact, personally I have decided never to invest with Fund Management Companies because my funds are still locked up with Firstbanc Financial services who have given their Furstfund and Heritage Fund to TTL Investments to manage.
TTL has not paid me as at now, they asked for six months at the last AGM before making payments. Investors have waited for one year without being paid, a new fund manager is trying to use investors funds for God knows what.
The fear of investors of Fund Management Companies is the government may not pay after the elections. If they don't pay before winning the elections, they may never pay heed to pleas to pay.
It is no wonder therefore that investors are shying away from fund management companies and this will continue if the Securities and Exchange Commission does not bring confidence to the space. What they have done so far leaves much to be desired.
It is as if the Securities and Exchange Commission does not have the interest of investors in their regulated space at heart. Their treatment of investors so far leaves much to be desired.
For example, how can investors who are owed and have not been paid for years be asked to give additional six months before being paid. What type of work requires six good months to complete? What type of validation requires six good months plus the one year they already had?
The SEC needs to up its game in the fund management companies space otherwise even the 14% will eventually reduce and the fund management sector will suffer as a result.
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