Malaysia’s financial planning sector has surged in growth, becoming essential for the financial health of many Malaysians. From 2015 to 2022, financial planning firms have seen a 42% growth, from 31 to 44. Meanwhile, the number of licensed representatives has spiked by 145%, reaching 1,455 by the end of 2022.
Datuk Seri Dr Awang Adek Hussin, the executive chairman of the Securities Commission Malaysia (SC), emphasized the need for the industry to evolve with market dynamics and rising investor expectations. Speaking at the Financial Planning Association of Malaysia (FPAM) Annual Signature Financial Planning Symposium 2023, he highlighted the growing investor inclination towards socially responsible investments (SRI). He urged the sector to innovate, adopt advanced technologies for customized services, and focus on upskilling for future demands.
Dr. Hussin pinpointed that modern investors prioritize holistic strategies over isolated product investments. This shift demands more personalized, long-term investor engagement. To cater to this, the SC aims to foster a comprehensive wealth management model spanning the capital market and financial sectors.
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Dr. Hussin further pushed for industry-driven initiatives to nurture future talent. Collaborations with universities and professional associations are crucial. Such partnerships can design courses to shape future financial planners, ensuring the industry thrives with high-quality local talent.
Globally, the financial landscape is shifting. Key elements like geopolitical scenarios, global monetary conditions, and corporate profits will drive the capital market. Recent global inflation moderation hints at major central banks nearing their monetary policy tightening’s culmination. Both the US Federal Reserve and the European Central Bank (ECB) made rate increments recently but signaled that further hikes might be limited.
Locally, the introduction of the government’s Madani Economy framework has brought clarity. Post the Covid-19 pandemic, Malaysia’s economy experienced a 4.2% year-on-year GDP growth in 2023’s first half. Factors such as a strengthening labor market, steady domestic demand, and boosted tourism played roles. The economy currently surpasses the pre-pandemic real GDP by over 6% and projects a consistent 4-5% growth in 2023. The Madani Economy framework promises to bolster investor trust, drawing more investors into the domestic capital market. This opens doors for financial planners to expand clientele and aid clients in wealth accumulation.
Dr. Hussin also brought to light government plans to support the establishment of family offices in Malaysia. The objective is to attract a diverse investor base to fund small and medium enterprises (SMEs) and modern economic models. These family offices will seek expertise in various investment areas, from conventional methods to tax and estate planning. This presents a golden chance for licensed financial planners, positioning them to serve these incoming family offices.
In essence, the financial planning landscape in Malaysia is dynamic. As the industry grows, its adaptability and foresight will determine its success in meeting Malaysia’s evolving financial needs.
Based on information from The Star.
