Malaysia’s Financial Planning & Wealth Management Industry
By: K.R. Raju (ChFC, CFP,RFP)
National President
Malaysian Financial Planners & Advisers Association

Malaysia’s financial planning and wealth management industry is now at a stage where regulators, practitioners, product manufacturers and all stake holders must make important decision about its future: either as one which offers solutions and services that are genuinely suited to the client; or one which just pursues the economic benefits of selling products.

The current product pushing approach is not sustainable if the industry wants to be in a position to raise competency standards among advisers, broaden discussion with clients from wealth creation strategies to cover wealth preservation and succession planning, and ultimately retain more relationship onshore.

Product providers say, due to the absence of a well-developed local industry, Malaysians take their wealth to be managed outside of Malaysia. Therefore, there is an urgent call for increasing the range of wealth management products available with the aims to attract offshore Malaysian wealth as well as attract foreign wealth.

Malaysia continues to be the third largest domestic currency bond market in Asia excluding Japan. In 2009, total corporate debt issuance increased 22 percent year-on-year to reach RM61 billion.

The Malaysian financial and wealth management environment needs to be more open and also needs to provide a lot more education to customers as well as advisers, covering various areas and topics – ranging from the meaning of holistic advice and being able to service clients effectively, to technical product knowledge and “acting” like an adviser.

In essence, effort to improve the level of professionalism via more formal training is required to help wealth managers become more respected as service or product/solution providers.

Proper consumer education is needed if new growth engines, such as private pensions, wealth management and assets management, with their more complex and sophisticated products, are to take off.

The joint venture between Malaysian & Australian firms are expected to achieve cost savings in part by rationalizing and consolidating key functions including technology, operations, sales support, products development and marketing. The scale of this venture will provide clients with access to both the Australian and Malaysian’s extensive global networks for the best market intelligence and investment opportunities wherever they originate around the world, while continuing to enjoy the first-rate client services that has long characterized both wealth management and financial planning industries.