By BABAJIDE KOMOLAFE

In the last edition, we made a case for concerted, deliberate plan to educate investors at the retail level. Such effort will facilitate inflow of funds into the capital market from the grassroots. Most importantly, it will enhance confidence among retail investors, and help militate against many of the malpractices presently going on in the market.

This edition highlights another lesson from complaints received from investors, which is the failure of shareholder groups and absence of an effective investor advocacy group.

It is so apparent in many of the complaints received by Investors Forum.

It is easy to accuse regulators and operators in the capital market of not paying enough attention to the plight of investors, shareholder groups are much guiltier.

In Nigeria today, there are so many shareholder groups in the country, but you cannot but wonder what is their purpose and what effort they are making to mobilise investors and enlighten them.

Most investors in the major cities have some awareness, but most outside the cities, especially the five major cities, have little awareness and understanding. If anything, they are the ones that need the help of shareholder groups. But alas, they don’t even know about the existence or awareness of these groups. In one of the previous edition, a leader of a shareholder group boasted about the effort of its group to educate its members, and fight for them, good.

But the issue is what the number of its membership is?  In fact, another revelation is that few of the people leading these shareholder groups are knowledgeable enough about the capital market. As many as they are, you cannot see any of them making conscious effort to reach out to investors across the country. None of them seem to have that vision; none of them even have visible widespread structures.

Common to the leaders of these shareholder groups is their apparent dislike for  the Securities and Exchange Commission, SEC, and the Nigerian Stock Exchange,NSE. They are always quick to accuse these regulators of insensitivity to the plight of investors, but they are also guilty. In as much as they are not making efforts to reach out to investors through massive drive for membership, they are also insensitive to investors.

What is needed is  an investor advocacy group that will target every investor across the country, especially those outside the major cities. Such a group will make it its vision to reach everybody that has bought the shares of any company on the NSE  to be its member. The group will continuously invest in publicity campaign for membership drive.

It will have at least an office in every state, create simple, easily accessible means to disseminate information and receive complaints from investors. In fact, it must also have a unit or team that is dedicated to helping investors resolve challenges and complaints. The implication is that:  opportunity for malpractice and exploitation of investors will be minimised; investors will have an independent platform to channel their grievances, which can advocate for them should the operators and regulators ignore their complaints. It would be challenging to establish and operate such group, but it is needed and also doable.