The month of October is that time of the year where the financial planning profession come together to raise awareness of financial literacy and financial planning in Malaysia among the public.
Vincent Kwo, President of the Malaysian Financial Planning Council (MFPC), weighs in on the state of financial literacy and financial planning in Malaysia, why one should engage a financial planner and what MFPC is doing to uphold the best standards of practices in the industry.
Smart Investor: Are there any recent initiatives, campaigns or events by MFPC to promote financial literacy and financial planning in Malaysia this year?
Vincent Kwo: The Malaysian Financial Planning Council’s objectives include promoting the development and enhancement of the financial planning profession in the country, as well as elevating financial literacy and financial planning in Malaysia.
To meet the first objective, we conduct professional financial planning programmes that lead to qualifications recognized by the Securities Commission (SC) and Bank Negara Malaysia (BNM). This ensures Malaysians access to the highest quality of financial planning services provided by qualified and knowledgeable financial planners.
As for meeting our second objective, we continually embark on various initiatives, conduct programmes and events for the Malaysian public at absolutely no cost to promote financial education. The aim of these initiatives – all of which are devoid of any commercialization – is to stay in the forefront to raise the financial literacy and financial planning in Malaysia for the rakyat, which is at a worryingly low level.
We are immensely proud that our initiatives have reached out to and benefitted thousands of Malaysians, empowering them with financial knowledge for their and their families’ financial well-being.
The first half of 2022 saw us hold four of our award-winning My Money & Me workshops virtually for youths in KL, the east coast zone, the northern zone and the southern zone. These programmes are a regular feature in our itinerary, which are evidence of our efforts in contributing to the rakyat’s financial well-being and ultimately advancing the development of the nation.
The workshops are cross-collaborative programmes with Bank Negara Malaysia, SC, OFS and SIDREC, EPF, AKPK, LIAM, MTA, FIMM, LHDN and MFPC.
The topics at our basic financial literacy My Money & Me workshops include asset protection, asset accumulation, asset management and asset distribution, vesting Malaysian youths with financial knowledge. The workshops will also empower youths to practise positive financial behaviour and gain strong financial capability well into adulthood and their retirement years, ensuring their financial and emotional wellbeing.
During the My Money & Me workshop in March, we launched an e-learning portal https://mymoney.mfpc.org.my/ with free access for the public. The self-paced learning available will ensure resources are available to build the financial knowledge of the public. The portal comprises of subjects related to conventional and Shariah financial planning.
In addition, we conducted numerous series of Pocket Talks covering financial planning topics, free for the public. These aim to raise public awareness of the importance of financial education and planning.
Raising Awareness Of Financial Literacy And Financial Planning In Malaysia
We have conducted 20 talks to date in conjunction with our MFPC Industry Talk with local universities. The talks are conducted in collaboration with financial planning firms, financial institutions and trade associations to promote the importance of financial planning, and to instil interest in financial planning as a profession in young adults.
In the pipeline are three more My Money &Me workshops for the year, for Sabah, Sarawak and Selangor.
Other programmes in the pipeline include an e-Tournament 2022 in October 2022 entitled Game for Money. 20 universities will participate in the event. The aim of the tournament in to provide financial education as well as to instil interest in financial planning among undergraduates.
We will also participate in Bersama InvestSmart® in Sarawak, in September. This is an event initiated by SC that seeks to create more informed investors who are self-reliant and able to make investment decisions that are right for themselves.
MFPC is confident that our numerous financial education programmes have made and will make a difference in the lives of Malaysians, enhancing their upward mobility and creating lasting and positive changes.
SI: What is your take on the state of financial literacy and financial planning in Malaysia, especially given the past couple of pandemic-fuelled years?
VK: The recent pandemic drove home the fact that financial planning and literacy are essentials, not options. Many people lost their income unexpectedly and matters were made worse for those who did not have a comprehensive financial plan.
Unfortunately, financial literacy and financial planning is very low among Malaysians, which worsened the financial problems brought on by the pandemic. MFPC’s various free financial education programmes to raise public awareness and literacy aim to aid the public to improve their situation.
We plan to continue working to this end, so many more Malaysians understand the importance of financial planning and education, and will be better equipped to withstand any similar circumstances that may arise. We look forward to working with our partners in the effort to improve the financial well-being and lives of the rakyat.
SI: Why does one need a licensed financial planner in their life?
VK: Various studies, including the Capital Market Development Fund (CMDF) report on Financial Literacy and Utilisation of Financial Advisory Services in Malaysia, reveal that Malaysians generally have a worrying low financial capability, do not know how to manage their money, and do not plan ahead. This does not bode well for their financial sustainability and makes them prone to falling into the bankruptcy trap, and become prey to loan sharks and get-rich-quick scams.
We recommend that one should have a complete financial plan for oneself, and if you don’t have a plan, to seek assistance from a licensed financial planner to develop a plan.
A licensed financial planner can help one to establish a personal financial plan, give measurable goals to work toward, track progress, reduce doubt about decision and make better financial decisions. This will help one to manage cash flow and manage debt efficiently.
Planning can be tailored to suit every personality type and meet different needs at different times of one’s life stages. A licensed financial planner can provide the necessary advice on changes and adjustments to support one’s lifestyle, resulting in peace of mind and general well-being.
SI: What should a person look for in a financial planner?
VK: It is most important that we seek the services of a licensed financial planner. A financial planner with the Registered Financial Planner (RFP) or Shariah RFP designation is licensed with Bank Negara Malaysia and the SC, and holds the Financial Adviser’s Representative (FAR) and Capital Markets Services Licence (CMSL) respectively. We can also check against the list of licence holders provided by Bank Negara and SC.
As for the other qualities, the following should be considered: trustworthiness, ability to provide evidence of a good track record of success, ability to provide independent advice, compatibility with the client, the ability to provide up-to-date information and the ability to refer to other specialists if required.
In short, one should look for professionalism in a financial planner. MFPC provides an evolving set of Best Practice Standards and Code of Ethics for adherence by our RFP and Shariah RFP designees. This is to ensure professionalism in financial planning services providers, prevent exploitation of clients, and to preserve the integrity of the profession.
This is also to ensure Malaysians will benefit from the highest quality of financial planning services. It demonstrates clearly the importance we place on ethical behaviour in the profession. At the same time, this will help in raising awareness of financial literacy in Malaysia.