Malaysian economy to continue on 4%-5% growth path: SC chief

Kuala Lumpur: Malaysia’s economy is forecast to remain on a moderate growth path of 4-5% this year, supported by firmer consumer and investment spending and a recovery in external trade.

Securities Commission (SC) chairman Datuk Seri Dr Awang Adek Husin said this would attract more foreign inflows and investors to the domestic capital market, giving financial planners an opportunity to expand their client base and grow the wealth of existing clients.

In his speech today at the Financial Planning Association of Malaysia’s (FPAM) Annual Signature Financial Planning Seminar 2024 themed “Navigating the Financial Landscape”, the Malaysian economy continued to see moderate growth in 2023. Despite challenging global trading conditions.

„Total market capitalization expanded to RM1.8 trillion at the end of last year, up from RM1.74 trillion at the end of 2022. Fund management’s total assets under management rose to RM975.5 billion, up 7.6%. From RM906.5 billion in 2022, to RM906.5 billion in 2021. Exceeded RM951.1 billion, a record year, he said (Tuesday) with the stock market capitalization hitting RM2 trillion for the first time. Point psychological level since 2022. The market is up more than 10% this year has risen

Awang Adek said the industry has seen good growth in the past few years with the number of firms increasing by more than 32% since 2015, and more professionalism is needed among financial planners and firms to ride the winds of change and seize opportunities.

Publication of Company operating standards FPAM’s handbook is a positive step towards professionalizing the industry, he said. The manual will serve as a guide for companies to establish a stable foundation and implement good behavior that prioritizes the needs of their customers.

“Furthermore, the SC has issued revised guidelines on conduct for capital market intermediaries to raise standards of professionalism and integrity. This will help attract and retain the next generation of long-term customers.

“The revised guidelines strengthen the role of the intermediary board and senior management in fostering a corporate culture where the interests of clients are prioritized.

„It also clarifies the SC’s expectations of an intermediary’s duty to act honestly and fairly without misleading or deceiving clients. In addition, the revisions revise the obligations to ensure that intermediaries exercise care, skill and diligence and consider the client’s interest when providing personal advice to clients,” he said.

Awang Adek said the amendments will take effect from October to give middlemen enough time to ensure compliance.

Meanwhile, Named Malaysia is poised to attract more foreign inflows as Asia’s largest intergenerational wealth transfer, Awang Adek said.

According to HSBC Bank, Asia’s richest baby boomers are expected to pass on about US$1.9 trillion in wealth to future generations, he said.

„The financial planning profession is well positioned to take advantage of this opportunity because of the long-term relationships built over many years,” he said at the symposium.

Also, this opportunity not only enhances the quality of financial planners’ services but also expands their client base.

Also, Awang Adek pointed to the growing interest in sustainability among millennial investors, which financial planners can tap into.

A study by the Institute of Capital Markets Research found that more than 70% of millennials and Gen Z are likely to invest in options that promote sustainability.

“While many investors have good intentions, they may lack knowledge about environmental, social and corporate governance or sustainable investments such as sustainable and socially responsible investment (SRI) funds.

„Therefore, financial planners need to increase their understanding and develop their skills in this area,” he said.

To facilitate this, the SC and Investment Managers Federation Malaysia will publish a comprehensive guide to assist planners and advisers in navigating the complexities of SRI funds.

This guide aims to ensure that SRI considerations are a regular part of financial advice.

According to Awang Adek, the financial planning industry has seen significant growth in the number of firms, with an increase of over 32% since 2015.