17 June 2013

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 poor financial planning. After finding out, we're surprised that actually not many of us know that there is this NEW distribution channel in financial place --- Financial Planner.

The NEW Alternative...

Traditionally, when we looking for certain financial products or services, normally we will go to either agents or banks. Example, for life insurance or unit trust, we buy from life insurance agent or unit trust consultant or banker.

This trend continues for so many years back then until Securities Commission of Malaysia and Bank Negara Malaysia comes out a framework or guidelines introducing financial planning industry in year 2007. Then, financial planning firms emerge in the market place. Of course, financial advisor/planner came into picture naturally.

Role of a Financial Planner?
By definition (Wikipedia), 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 highly regulated and legislation was in place requiring a person to be licensed before he/she can call himself/herself as 'financial planner'. Authorities view financial planner as a professional and such title could differentiate them from the rest of financial practitioners. Same goes to titles like 'Dr' only for Doctor or doctorate graduates, and 'Ir' for qualified professional engineers to instill the confidence of public based on titles and qualifications.

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

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

Source: Role of Financial Planner handbook

This article was contributed by Alex Yeoh, a licensed financial planner with a reputable financial planning firm. For more info, you may reach him via email alexyeoh@vka.com.my


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