The Rise of Financial Planner

As promised, Finance Malaysia blog would like to educate public at large on the importance of personal financial planning, after knowing that most Malaysians falls into debt traps because of this poor financial planning. After finding out, we're surprised that actually not many of us knowing this NEW distribution channel in financial markets --- Financial Planner.

The NEW Alternative...

Traditionally, when we sourced for financial products or services, we normally go to either agent or bank. Example, for life insurance or unit trust, we buy from life insurance agent or unit trust consultant or banker.

This trend continues few years back, when Securities Commission of Malaysia and Bank Negara Malaysia comes out a framework or guidelines introducing financial planning industry. Then, financial planning firms emerge, until only recently some of us would have heard about its existence in the market place. Of course, financial planners came into picture too.

Role of a Financial Planner?

By definition, a financial planner is a practicing professional who covers the whole process of financial planning including cash flow management, education planning, risk management, investment planning, retirement planning, estate planning, tax planning and business succession planning (for business owners). The key defining aspect of what the financial planner does is that he/she considers all questions, information and advice as it impacts the financial situation of client. 

Highly Regulated?

In Malaysia, the term 'financial planner' was regulated and legislation requires a person to be licensed before he/she can hold himself/herself out as a 'financial planner'. Authorities view financial planner as a professional and should be differentiate it from the rest of financial practitioners. Just as the title 'Dr' only for Doctor or doctorate graduates, and 'Ir' for qualified professional engineers to instill the confidence of public based on titles.

It's an offence to call on yourself as financial planner or practicing financial planning for clients, without license in Malaysia. Those who found commits such offence, on conviction, be liable to a fine not exceeding RM5mil or to imprisonment not exceeding 5 years term or to both. Wow... Considered as a serious offence.

Even said so, many insurance agents or unit trust consultants commits the offence without realizing it. So, please tell your insurance agent or unit trust consultants whom you love or care about.

This article was contributed by Alex Yeoh, a licensed financial planner with a reputable financial planning firm. Finance Malaysia blog will work together with Alex in bringing more interesting articles on personal financial planning. For more info, you may reach him via email alexyeoh@vka.com.my

Launching of Association of Financial Advisers (AFA)

31^stOct 2012 would be a historic day for Malaysia financial planning industry with the launching of newly formed Association of Financial Advisers (AFA) at Lanai Kijang, Bank Negara Malaysia. From now onwards, AFA will effectively represent all the Licensed Financial Advisers and Corporate Unit Trust Advisers (CUTA) Firms. The association is approved by Registrar of Societies on the 16th August 2012 with the support from Bank Negara Malaysia.

In conjunction with its launching, AFA also held its inaugural financial advisers conference titled “Charting New Frontier – FA the Future”. During the conference, audiences were empowered with up to date practices by Bank Negara and Securities Commission. Then, an interesting forum on the Future of Malaysia Financial Advisers Industry was discussed with everyone attentions. How we benchmark ourselves with other countries? We heard some success stories from Singapore and Hong Kong.

It was a successful milestone event for financial planners and CUTAs judging by the numbers of financial practitioners who attend the event. Product manufacturers, such as insurance and unit trust companies, started to realize the potential influences of financial planners and CUTAs in distributing their products and services. This signifies the bright future of financial planning industry moving forward, in line with the Capital Master Plan 2 by Securities Commission of Malaysia. There is no better time to be a licensed financial planner now.

This is a guest post contributed by Alex Yeoh, a licensed financial planner with VKA Wealth Planners. Finance Malaysia is glad to have Alex's input on financial planning matters. You may contact him via alexyeoh@vka.com.my

Do you understand the PRS Framework and its Lingo?

Before jumping into the bandwagon of private retirement schemes (PRS), we should understand the PRS framework first. What is the structure behind the scene? Does our invested money in safe hands? Who are the regulators? These were the few typical questions we should find out. No worries, all of these will be answered here... (yeah, give us a "Like")

• Manufacturer?
  PRS are offered by approved PRS Providers. Each PRS will include a range of retirement funds from which individuals may choose to invest in, based on their own retirement needs, goals and risk appetite.
  
• Book-keeper?
  The PPA functions as a record keeping and resource centre for data on all transactions performed by contributors. It will facilitate transactions and promote efficient administration. The PPA will also act as a resource centre for data and research relating to the PRS industry in Malaysia.
  
• Safe-keeper?
  The assets of each PRS will be segregated from the PRS provider and held by an independent Scheme Trustee under a trust. Yes. It must be "independent" to safeguard investors money.
  
• Regulator...
  All of the above mentioned parties, namely the PRS providers, the PPA, the Scheme Trustees and distributors of PRS were being regulated and supervised by Securities Commission (SC). This was to ensure the proper functioning of the PRS industry and protects members, via prudential and investor protection requirements.

After all, still blur about the term used above? No worries. Finance Malaysia Blog take the initiative to explain the PRS lingo against that of Unit Trust for ease of understanding:

For more PRS info, you may contact Alex Yeoh (alexyeoh@vka.com.my), a licensed financial planner who can distributes products from multiple PRS providers. Thank you.

What is Private Retirement Schemes (PRS) ?

Are you ready for your retirement life? If not, what and how are you going to do before it is too late? These are a few critical questions Malaysians should ask ourselves without further procrastination. With increasing life expectancy and rising living standards, many Malaysians find that their savings are inadequate to meet their retirement needs.

Private Retirement Schemes (PRS) form an integral feature of the private pension industry with he objective of improving living standards for Malaysians at retirement through additional savings of funds. As long-term investment vehicles, PRS are designed to help enhance adequacy and expand coverage of retirement benefits to all segments of the population. It complements Malaysia's mandatory retirement savings scheme - EPF.

Voluntary?

Yes. It's totally up to YOU to contribute voluntary anytime. Who can participate? Anyone, be it individuals (retail investors, self-employed and employees) or employers. Offering private pension benefits could be a tool for employers to attract and retain skilled talents. We will discuss this in detail later.

Who are PRS Providers?

As of 1st June 2013, there are a total of 8 PRS providers approved by Securities Commission as below:

• AmInvestment Management
• AIA Bhd
• CIMB-Principal Asset Management
• Hwang Investment Management
• ING Funds Bhd Kenanga Investors Bhd
• Manulife Asset Management Services
• Public Mutual
• RHB Investment Management

Stay tune for more info about PRS...

For more PRS info, you may contact Alex Yeoh (email: alexyeoh@vka.com.my), a licensed financial planner whom representing multiple PRS providers. Thank you.