Financial Planning Facts Every Malaysian Should Know

Financial Planning Facts Every Malaysian Should Know

What do you think of when you hear the term “Financial Planning”?

Do you think that financial planning is something only for the rich? Or that if you were to plan for your finances, it will make you a cheapskate?

“I will think of Financial Planning when I have more money”.

Is that you?

What Is Financial Planning?

Financial Planning can mean different thing to different people. However, this one definition provided by Financial Planning Standard Board (FPSB) best explained it.

“Financial planning is the process of developing strategies to help people manage their financial affairs to meet life goals.”

Personal Financial Planning Is Not Easy

Based on a global survey conducted by FPSB-GfK in 2015, it seems that most of us need to embrace Financial Planning (now).

Malaysian are not confident when it comes to money matters
Source: FPSB-GfK Global Consumer Financial Planning Survey, 2015.

The above results show that consumers are faced by 3 major challenge. Firstly, we are not very good when it comes to financial knowledge. Secondly, we have problems doing the right thing and gaining self-control. Thirdly, we are not certain that we can achieve our life goals.

Clearly, most of us have issues and we need to do something about it.

Challenges For Personal Financial Planning

Since most people are not confident with achieving their life goals, why are they not taking action?

The same survey provided some insights to help us understand what’s stopping them.

Top 5 reasons people not having financial plan:

The Top 5 Reasons Malaysian Not Doing Financial Planning
Source: FPSB-GfK Global Consumer Financial Planning Survey, 2015.

How Can We Get Help?

If you are not sure whom to trust, you need someone who is trustworthy. Likewise, if you do not know where to start, you need someone who can point you to start. Personal finance is complicating, and can be very confusing for the untrained financial consumer. Therefore, having a qualified professional who have experience can guide your hand and help you focus on what’s important.

From the same survey, this is how we tend to looks for knowledge and information about personal finance.

Sources Malaysian Rely on For Information for money matters
Source: FPSB-GfK Global Consumer Financial Planning Survey, 2015.

Friends & Family maybe the instinctive ‘go-to’ for us. No doubt, they may offer us advice honestly, but you can’t be too sure about the quality of advice. While they are highly likely to be trustworthy, they may not be knowledgeable. Websites offer us instant answers to many questions we have. However, itself presents a challenge for us to ensure the information is correct or unbiased. A Financial Planner may seems like the next best source. The key is whether or not you are dealing with a real Financial Planner, or someone whose main job is to sell financial product. No wonder 66% of survey respondent were not sure who they can trust.

Try Work With A Licensed Financial Planner

A Licensed Financial Planner is someone who is professionally trained, qualified, to provide financial planning service. In Malaysia, we are the first country to regulate Financial Planner. If you want to provide Financial Planning service in Malaysia, you got to apply for license.Such licenses are regulated by Securities Commission and Bank Negara Malaysia. Such person also has to be a certified member to Financial Planning Association of Malaysia (FPAM), or ordinary member to Malaysian Financial Planning Council (MFPC).

One of the key requirement in applying for license is the applicant has to possess professional certificate such as CERTIFIED FINANCIAL PLANNER (CFP), Registered Financial Planner (RFP), Islamic Financial Planner (IFP), Shariah Registered Financial Planner (Shariah RFP), Chartered Financial Consultant (ChFC). Apart from qualifications, the applicant also has to pass a Fit and Proper assessment. This means they are healthy in their own financial affairs. Their CCRIS and CTOS are in good standing, not having any criminal or legal issues, not under insolvency and etc.

Your Money Manager For Personal Financial Management

Through working with a Licensed Financial Planner, you can have many of your questions answered. You can get independent advice on how to deal with your financial problems and struggles.

A Licensed Financial Planner will evaluate your cash flow position and provide you strategies on how to strengthened it. It is fair for you to assume that they are generally not interested in selling or pushing financial products to you. For instance, they can provide you independent advice on how to invest via EPF i-Invest.

Their main interest is in understanding your situation and identify your issues. With that knowledge, they can then develop strategies that will get you nearer to where you want to be. A person who is looking to profit from purchase of products will not need to go through those time consuming and messy analysis. Your personal money manager, on the other hand, would provide you with your personal financial plan.

Can A Licensed Financial Planner Help Increase Our Success?

You may ask, “Do I Need A Financial Planner?”.

Through the same global survey, we can see that there’s strong reason for us to work with a Licensed Financial Planner. The outcome clearly show that those working with Financial planners feel better prepared

The Value A Certified Financial Planner
Source: FPSB-GfK Global Consumer Financial Planning Survey, 2015.

The above shown that people who worked with a Certified Financial Planner tend to have brighter outlook. They were more confident on achieving their life goals. More importantly, they agreed that a Financial Planner can enhance their knowledge. With guidance and coaching, they also felt their behavior became positively supportive towards their goals.

Chat With A Financial Advisor / Financial Planner Near You

We work with a network of Licensed Financial Planner who have wide experience and competency. Drop us a message and we can connect you with one financial planner who is near your area.

If you are worried about money, meeting up for a chat would not cost you an arm or a leg. In fact, the first meet-up is to understand your situation and what are the concerns you have. It is also a perfect time for you to understand how they work, as well as their process. At the end of this meeting, the Financial Planner will have an idea if they can help you. They may also share with you some ideas on what you need to do.

If both see a fit and agree to work together, then you guys can take it from there. And you will be on your way to achieving your lifegoals and financial freedom.

Drop us a message here, and we will connect you with your personal money manager.

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