Malaysians financial literacy rate at this point of writing is merely 36%. This falls within failed state for sanely individual to gauge. Something need to be done in order to helps Malaysians from falling further into middle income trap which is Malaysia hardly moving now. To make it worst Economic Transformation Plan website is no longer available to access.
According to Economic Transformation Plan  which was launched by DS Najib Razak back in 21 September 2010, stated:
Low levels of financial literacy. The level of personal financial literacy today is low overall. With growing consumerism as well as changing customer expectations, there is a need to reinforce greater financial literacy to help the Rakyat to better manage their personal finances in line with our move to a high income economy. Proper consumer education is needed if new growth engines, such as private pensions, wealth management and asset management, with their more complex and sophisticated products, are to take off.Economic Transformation Plan
The need for Financial Planner
For the time being there are around less than 4,000 of Financial Planner registered with Financial Planning Association Malaysia as well as Malaysia Financial Planning Council. With Certified Financial Planner and Shariah Registered Financial Planneris roughly around 1,500 and 2,500 person respectively.
If this number (considering they are active) is required to serve labour forces with market size at 15 million people, these Financial Planner need to entertain 3,000 people! That is so huge. If they are working round the clock, these people need to wait for at least 125 days before his/her next session. Basically we are in short of Financial Planner in Malaysia.
In Malaysia, Securities Commission Malaysia is entrusted to safeguard capital market activities. Meanwhile Bank Negara Malaysia as a statutory body is responsible to play developmental role in developing the financial system infrastructure. Therefore these two entities is paramount to the growth of Financial Planner in Malaysia.
Financial Planning Association Malaysia and Malaysia Financial Planning Council acting as certification body for whomever decided to become a Financial Planner in Malaysia.
Licensed Financial Planner
Once you have obtained your competency certificate from either one of these Certification Body as above then you may start to think about practising your profession. In order for a Financial Planner to practise in Malaysia, he/she need to be registered as a Licensed Financial Planner with Securities Commission Malaysia by taking Capital Markets Services Representative’s Licence through Financial Adviser company. By doing so you may now call yourself a Licensed Financial Planner
Source of Income
As a Financial Planner you may derive your income as per table below:
Being a Financial Planner it is not only limited to:
- Investment (namely Unit Trust)
- Protection (namely insurance takaful)
- Tax Planning (namely Private Retirement Scheme)
- Financial Planning
- Estate Planning
It is beyond that. Financial Planner is some sort like a Doctor in healthcare industry. Patient walk in to the clinic. Meeting a Doctor. Explaining to the Doctor about his/her pain. Doctor will prescribe medicine based on his/her pain experienced.
Without any explanation from a client, Financial Planner may not advise a good financial plan that they need. It takes two to tango. Mutual understanding is paramount in financial planning industry. Otherwise you may end up swaying away from your so called plan.
Role of Financial Planner
The role of Financial Planner in accordance to Economic Transformation Plan is to acting as 3rd party. An independent party without any vested interest to help one build his/her wealth accumulation during labouring day. Wealth distribution prior to his/her retirement.
By doing so every Malaysian may achieve his retirement days independently and they may outlive their retirement days without exhausting his/her saving. In facts, there is some spare prior to the end of their lifecycle. That is very important. However not many of Malaysians currently able to achieve this feat.
As we set to become high income nation (god knows when) in the near term, we may see financial mobility based on social status. Upper M40 will migrate to lower T20 as they advance in their career.
Rising affluence among Malaysians. As Malaysia develops into a high-income economy, the increasing affluence of its population will fuel demand for new and higher value financial activities.Economic Transformation Plan
Most of Malaysians are facing financial burden. This is true to most of us as we’ve started our career with low salary. For instance our graduate’s salary nowadays started with slightly better than Malaysia’s poverty line income  at RM 2,208 per month .
At 2.8 percent of GDP, life insurance penetration in Malaysia is still low relative to other developed nations such as Singapore (6.1%) and Japan (7.5%). This is mainly attributed to a lack of disposable income among low-income earners to buy protectionEconomic Transformation Plan
Private Pension Fund
To create sufficient expenses during your retirement days, government had decided to introduce Private Retirement Scheme. This is to supplement EPF mandatory contribution by the employer. We called Private Retirement Scheme. Under pillar number 3, according to World Bank’s 5 Pillar Pension System Framework.
Further, the majority of EPF contributors exhaust their savings within three to five years of retirement. At the same time, the ageing population is becoming a larger part of the entire population. Consequently, the need for individuals to save more for retirement has intensifiedEconomic Transformation Plan
Limited Product from Asset Management Company
Truth to be told, currently they are limited financial product that is available in the market. Our capital market also quite small. Currently standing at RM 3.4 trillion  as at 2020.
Malaysia’s wealth management industry today is at a nascent stage, and is limited mainly to mass affluent banking and financial planning. Industry growth is impeded by the lack of competitive products. For example, hedge funds, structured products and absolute return funds are not widely available. Further, there is room to reduce the time taken to approve retail investment products in Malaysia by streamlining requirements and upgrading submission standards to intermediaries. The limited talent base is also an issue. In the absence of a well-developed industry locally, Malaysians may take their wealth to be managed outside of Malaysia.Economic Transformation Plan
Therefore, with aforementioned situation, I strongly believe Financial Planning industry shall be a pivotal role in driving Malaysia’s GDP for years to come. As we are concentrating into service sector, this is a wiser move for you to start considering Financial Planner as your next career!