Financial Advisors

KUCHING: Over the past few years, financial advisory channels had seen a notable difference in the sector in terms of growth and development. As the Malaysian government became more conscious of the remarkable growth potential for the financial planning industry, it recognised the industry as an important profession.

Alvin Tan, the head of distribution for Standard Financial Planner (SFP), in a recently held seminar in Kuching noted that countries like Australia and Singapore had experienced a significant decrease in their quantity of tied life agents over the past few decades. This was due to a change in clients’ demands for a more comprehensive financial planning strategy over their life span.

According to him, Independent Financial Adviser (IFA) was a new distribution channel for agency businesses and therefore was important as they helped investors to navigate through the variety of financial products and information.

Recognising the growing importance of equipping the nation with quality products and services, Malaysia introduced financial planning regulations through Bank Negara Malaysia (BNM) and Securities Commission (SC), he highlighted.

BNM came up with the Five Years Renewal Commission on Life Insurance Business that was especially catered to agents who wished to qualify themselves as IFAs. This programme enabled individuals to take back their five years renewal commission after joining the financial planning industry.

Moving forward, as an IFA, the adviser was qualified to join in the Million Dollar Round Table (MDRT). An IFA’s qualification to obtain the MDRT was much easier than a tied agent’s qualification as only the insurance product for a tied agent was calculated,” Tan further noted. Meanwhile, for an IFA, his insurance products, investment products as well as financial planning fees were all calculated as part of the adviser’s production.

To date, SFP is the largest independent financial services dealer group in Malaysia, with the most licensed representatives in Malaysia. SFP helped advisers to build the three pillars of business assets that included multiple sources of income (investment, insurance and etcetera), sustainable recurring income stream (business assets) and SFP company equity participation (growth of the industry and company).