Capital markets regulator the Securities and Exchange Commission of Zimbabwe (SecZim) has at least 6 functions that it must perform as part of its mandate.
Apart from regulating trading and dealing in securities, SecZim performs other key functions such as registering, supervising and regulating of securities exchanges and other licensed persons such as stockbrokers. SecZim is also responsible for encouraging the development of free, fair, and orderly capital and securities markets in the country. It advises the Government of Zimbabwe on all matters relating to securities and capital markets.
Last, but not least, SecZim’s other function is to promote investor education. Over the years, this key function was as good as non-existent. In fact, all players in the capital markets were little concerned with issues of investor education. Maybe they would just educate the few that would have knocked on their door.
For market players that are also little visible to the generality of the public, it meant very few Zimbabweans, apart from those in institutions such as pension funds, insurance firms, asset management and other financial services institutions knew about capital market platforms such as the Zimbabwe Stock Exchange (ZSE). This meant the stock market was seen as a preserve of a few individuals and institutions.
However, two or so years ago, the SecZim and the ZSE embarked on an investor education drive. SecZim appointed Farai Mpofu Head Investor Education a post that was previously not there. Further, SecZim launched The Investment 101 Handbook that provides background information an investor may need to get going, making informed decisions and asking the right questions. On its part, the ZSE launched ZSE Training Institute, a website-based platform that delivers online customised training and seminars. The vast courses on offer are designed to equip participants with knowledge and skills to improve their understanding on various aspects of the capital market.
Other capital market players are becoming more and more visible with several stockbrokers having launched investor education-related programmes. Others have also started video programmes where they discuss capital markets’ activities. Others are using their social media platforms for the same.
While investing in capital markets has the potential for very good returns, the returns can even be better if participants invest in knowledge first. Education is the key to sensible investing and according to Mac Duke, The Strategist, financial education is more valuable than money. Capital market players must double down on the efforts to provide high-quality financial education and to do it in such a way that better understands and supports the unique needs of different communities.
Amid the growing trend of stock trading through online platforms, there is need to create awareness among investors about the basic concepts of securities market.
Novice investors need to first learn how investing and the markets work and players in the sector must play a key role in investor education. The more market players can invest in education overall, the more trust they’re going to build and the more value they’re going to provide to their customers — and keep them as customers.
Focus should be on elevating underserved communities, getting people into the financial system.
With social networks experiencing an outburst of influencers generating content on investment topics, it is high time those who are qualified to do so step up their efforts as there is risk that followers, due to a lack of financial education, might not understand the complexities in the markets and will not be aware of the risks associated with the information they receive on social networks.
As much as people appreciate when this type of information comes from someone like themselves, market players still have a key role to play and make sure that new investors don’t turn investing into “a videogame.” Better still, market players can work with those “finfluencers” as a way of keeping the content under checks and balances.