Financial Education, Planning Important Amid Current Environment

KUALA LUMPUR, July 27 (Bernama) -- Financial education and better financial planning have become more important than ever to help Malaysians in managing their financial future, said Securities Commission (SC) chairman, Dr Awang Adek Hussin. He said retirement security is one of several significant long-term domestic issues that the nation must address. “Even before the pandemic, Malaysia’s retirement security was a major issue. Unfortunately, COVID-19 has exacerbated the problem. “The permitted special withdrawals from Employees Provident Fund (EPF) savings to smooth over the members’ cash flow needs have left more people with inadequate retirement savings,” he said in his keynote address at the 11th AFA Annual Conference today. Awang Adek stressed that while many may appear financially secure today, it is important for Malaysians to recognise the potential precarity and vulnerabilities that may confront them in the future. He said Malaysia must also cultivate and attract more talent to the financial planning industry in order to provide quality financial planning services. “It should come as no surprise that investors are increasingly seeking expert advice to help them meet their financial needs,” he said, noting that choosing the right financial plan was no longer simple, with the breadth of choices that include listed securities as well as unlisted corporate bonds or sukuk. Since 2015, the number of financial planning firms has increased by 42 per cent to 44 firms, while the number of licensed representatives has grown by 145 per cent to almost 1,400 individuals from 567 individuals in 2015. Awang Adek pointed out that the profitability of the financial planning industry -- including corporate unit trust advisors -- was also evident from the distribution of unit trust funds which has been encouraging, with a three-year average total sales of RM1.1 billion. “This has undoubtedly improved the financial situations of many Malaysians. However, I believe that this growth is also being propelled by the increasing complexity of financial products, and the public’s desire for assistance in dealing with this complexity,” he added. -- BERNAMA