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Scope expansion for financial planners, includes rating their services

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IN October 2020, Securities Commission (SC) announced the expansion of the scope of Licensed Financial Planners to include recommending stocks and bonds. This comes after rounds of consultation with financial planning associations in Malaysia under the Financial Planning Industry Working Groups.

IN October 2020, Securities Commission (SC) announced the expansion of the scope of Licensed Financial Planners to include recommending stocks and bonds. This comes after rounds of consultation with financial planning associations in Malaysia under the Financial Planning Industry Working Groups.

However, these licensed financial planners must equip themselves with competencies from M7 of SC Licencing Exams and the Investor Protection Professional Certification (IPPC) conducted by Association of Chartered Bankers.

This is in addition to their financial certification exams which may consist of either the globally-recognised CFP mark, IFP credential or RFP, Syariah RFP, ChFC credentials and a valid license from Securities Commission.

This is a positive move forward for financial planners to offer more holistic advice and recommendations when they draft the financial plans for their clients. Clients must ensure that their financial plan includes an evaluation of their money management, which includes debt management, priorities of life goals, protection, investment, taxation and estate planning needs before solutions are recommended. It should also contain only client-suited product recommendations and time-based action plans.

Financial planning is a regulated activity under SC, requiring the issuance of a licence. It is important that the public ensure they check the validity of the financial planner and scope of service before engaging them.

You can find out whether the financial planner is licensed and the scope of services provided at SC Public Register of Licensed Holders. From here you click on the planner’s name and the regulated activity change history or License Details.

In the example, the financial planner has investment advice and fund management licence in addition to financial planning meaning he can do fund management and give investment advice.

If anyone wants to peruse a list of certified and licensed financial planners before heading to SC website to check on their scope of services, click your way to SmartFinance.my. Here you can see their areas of expertise and even languages spoken. You can even have a preliminary chat with them privately by clicking the connect button before deciding to proceed. Chat with a few before deciding.

Most important question is how are they remunerated? It can be either by planning fees only, commission-based or a hybrid of commission and planning fees. The financial planner will let you know and once agreed, there will be a Letter of Engagement to set out their scope of services, restrictions, conflicts of interest and, of course, their remuneration.

You can also rate your planner. If you think he/she is good, you can also share their unique link with your friends or relations. The advantages of FPTech for your convenience. All done in the comfort of your armchair and device

Originally Published by Linnet Lee on Focus Malaysia. She is a Certified Member and CEO of Financial Planning Association of Malaysia (FPAM), 11th July 2021.
https://focusmalaysia.my/scope-expansion-for-financial-planners-includes-rating-their-services/
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