It is my great pleasure to be here today for the Malaysia Financial Planning Council (MFPC) 20^th Anniversary Luncheon. I would like to begin by first congratulating the MFPC for its two decades of contribution in developing and uplifting the nation’s financial planning profession. 

I would also like to put on record my appreciation to those individuals instrumental in driving MFPC to what it is today, including the past and present leaders of MFPC as well as council members and the advisory board, those with us in this room today as well as those who are not able to be here. 

Enhancing the financial well-being of the population is an important and critical pillar of any country’s economic and financial development. For Malaysia, elevating the financial well-being of our households and businesses is well articulated as one of the five strategic thrusts in our Financial Sector Blueprint.^[1]

Financial well-being refers to a person’s ability to meet ongoing financial obligations, stay resilient to income shocks, and make good financial decisions to achieve one’s financial goals and enhance one’s overall quality of life. 

For businesses, not only should the firms be in good financial health to withstand unanticipated financial setbacks, but equally important is that businesses, especially micro and small businesses are able to capitalise on emerging opportunities to upscale and secure future growth. 

It is important to note that measures to elevate financial well-being go beyond ensuring access. The desired outcome is for individuals and businesses to meaningfully benefit from their participation in the financial system by equipping households and businesses with suitable and affordable solutions, as well as empowering them with the financial capability to make sound financial judgements and decisions.

Equally critical is ensuring that financial consumers continue to be treated fairly. These desired outcomes underscore at its core the importance of the financial planner profession in the financial ecosystem and, critically, the importance of highly professional and fair financial planners. 

The MFPC has become a key institution in uplifting the standards of financial planning professionals in Malaysia. Since its establishment in 2004, the MFPC has helped Malaysians to access quality advice and elevate their financial well-being through services rendered by financial planners and financial adviser representatives.

As at end-2023, there are over 1,400 financial planners and 1,500 financial advisers in Malaysia, many of whom possess qualifications through MFPC’s Registered Financial Planner (RFP) and Shariah Registered Financial Planner (SRFP) programmes. To a large extent, the growing number of qualified financial planners and advisers has contributed towards the growth of new businesses in the life insurance and family takaful sector, which grew by a CAGR of 8.6% for the period 2018-2023.^[2]  

In addition to the RFP and SRFP programmes, I am pleased to see MFPC’s efforts in expanding the financial planning curriculum beyond the requirements of regulations, such as introducing a course on Masters in Financial Planning in collaboration with a private university and offering the Certificate of Proficiency in Financial Planning.

Such programmes help to establish recognition of financial planning in the minds of the public, as well as providing an avenue for formal instruction on this topic to a wider audience. The robustness of MFPC's financial education programmes is affirmed by the string of awards and accolades that MFPC has received throughout the years.^[3]

For Bank Negara Malaysia (BNM), several policies and initiatives are underway as we aim to secure the desired outcomes as outlined in the Financial Sector Blueprint. A notable development includes the implementation of the requirements specified in the policy document on the Professionalism of Insurance and Takaful Agents.  

Among the main new requirements are the introduction of fit and proper requirements, agents’ screening, and minimum qualifications for life insurance and family takaful agents. These are aimed at bolstering public confidence in the agency workforce as a capable, fair and trusted distribution channel

In this regard, MFPC plays a key role in providing the relevant training and assessment to ensure all agents would be able to obtain the minimum requirement within the next two years.

Moving forward, a more comprehensive review of the financial intermediary industry is being undertaken. BNM and the Securities Commission Malaysia (SC) are looking at opportunities for the rationalisation of regulations relating to financial planners and advisers. Such collaborative efforts have been highlighted in BNM’s Financial Sector Blueprint and SC’s Capital Market Masterplan 3. The industry will be consulted prior to the finalisation of any proposals.

Enhancing the financial education level of individuals and households remains the key strategy to encourage responsible and effective usage of financial services. Together with other partners of the Financial Education Network (FEN), we acknowledge MFPC’s contribution towards enhancing public knowledge and awareness via its ‘My Money and Me’ financial literacy programme.

As a result of the initiatives under FEN, we have seen improvements in the financial knowledge, behaviour and attitude of Malaysians, as captured in the FEN National Strategy Progress Report 2019-2022. However, the report also highlighted that there is ample room for improvement, mainly in retirement planning.^[4] Based on the Financial Literacy Survey in 2022, 53% of respondents will rely entirely on EPF savings post-retirement, while 48% have not started any retirement planning.

Malaysians also lack the ability to withstand financial shocks. For example, urban millennials lack insurance coverage, with 42% not having life insurance coverage and 23% not having health insurance. Such segments of the population can greatly benefit from the skills and knowledge of financial planners and advisers.

A trend that the industry should be prepared for is the rapidly rising digital savviness of its customers. The adoption of technology and extensive internet access enjoyed by most Malaysians have allowed us to interact and transact at higher rates of efficiency.

This is reflected in the fast-paced expansion in the electronic payments space, which recorded an increase from 9.3 billion transactions in 2022 to 11.5 billion in 2023 –equivalent to 343 e-payment transactions per person. Nevertheless, advancements in technology also expose consumers to various digitalised channels of information, both true and misleading.

Online influencers and social media videos that focus on financial advice have increasingly gained popularity^[5] alongside the gamification of retail investment. Many financial influencers, or ‘finfluencers’ for short, provide good financial advice. Unfortunately, some – either through ignorance or deliberately with ill intent – provide misplaced opinions.

We have seen social media posts promoting investments in assets such as cryptocurrency or calls to invest in specific stocks and non-fungible tokens (NFTs) without consideration of consumers’ understanding of such investments and, most importantly, their risk appetite and tolerance. 

A typical approach is for these finfluencers to display or flaunt the lifestyle of the rich and wealthy to convince their followers of their success and the legitimacy of their financial approach. It is against these errant finfluencers that financial planners and advisers will compete.

As MFPC celebrates its 20^th anniversary, adaptability to changes in society and the market becomes increasingly important. To respond to these new challenges, I am urging financial planners, financial advisers, and the MFPC to consider the following:

• Firstly, financial planners and advisers must continuously update themselves with the latest financial developments to provide competent and comprehensive advice. MFPC’s talks and webinars, such as on tax and sustainable finance planning, provide good avenues for learning.

• Nevertheless, the onus for improvement remains with individual financial planners and advisers themselves. This reminds me of an old saying by Benjamin Franklin, which goes, “An investment in knowledge pays the best interest.”

• Secondly, tighter collaboration within the industry is needed to exchange knowledge and encourage the development of a vibrant financial industry.

• Being on the front lines with consumers, financial planners and advisers are well-placed to identify opportunities for financial products and arrangements that can cater to the demands of financial consumers.

• Lastly, MFPC should take further steps to increase the prominence of its programmes and qualifications, as well as financial education in general. These can be undertaken by expanding MFPC’s existing My Money and Me financial planning workshops.

• On the international front, we see organisations such as the Japan Association for Financial Planners^[6] actively providing exposure by leveraging on members for public seminars and free consultations and by carrying out outreach to schools. Through such routes, the public will see and understand the benefits of financial planners and advisers, while practitioners are able to reach out to a wider set of financial consumers.

Before I end my remarks today, allow me to leave you a quote from the late Nelson Mandela. He said, and I quote, “As I have said, the first thing is to be honest with yourself. You can never have an impact on society if you have not changed yourself. Great peacemakers are all people of integrity, of honesty, but humility.” 

Similarly to peacemakers, financial planners need to undertake the change before having the power to change the financial consumers and society at large. Honesty, integrity, and the humility to continuously enhance your professional competence shall form the foundations of this financial industry. Only with this, we will develop resilient financial consumers which will support and help drive the growth of the Malaysian economy.

Allow me to congratulate MFPC once again on its 20^th anniversary. I look forward to MFPC’s continued contribution and relevance in the decades to come. Thank you.

Bank Negara Malaysia

16 May 2024

[1] Bank Negara Malaysia Financial Sector Blueprint 2022-2026.

[2] From data published in BNM’s Financial Stability Review.

[3] The list of awards received by MFPC are as follows: Global Islamic Finance Awards – Championship Award (Islamic Finance Qualifications) 2021-23; Sustainability and CSR Malaysia Awards – 2021-2022; World Education Congress – Best Educational Institute in Banking and Insurance 2016; UNESCO Honourable Commendation for Financial Planning Awareness Programs, Wen Hui Award for Educational Innovation 2014.

[4] EPF’s Financial Literacy Survey 2022. Page 18, FEN National Strategy Progress Report 2019-2022 (fenetwork.my)

[5] The Finfluencer Appeal: Investing in the Age of Social Media (cfainstitute.org)

[6] JAFP’s activities for consumers (jafp.org)