More corporate unit trust advisers expected

Thursday, 27 August 2009 15:12

KUALA LUMPUR: The Financial Planning Association of Malaysia (FPAM) expects more financial planning firms to apply for the corporate unit trust advisers (CUTA) licence with the Federation of Investment Managers Malaysia (FIMM) in the near future, says its president Wong Boon Choy.

“As at end June, there are 36 capital market and services licensees (CMSL) for financial planning that are eligible to apply for CUTA. But, currently, there are three CUTA with another two applications pending approval,” said Wong during his opening address at the talk on Business Model and Business Opportunities for CFP (Certified Financial Planner) Professional.

Wong anticipated that there will be a surge in the CUTA application due to the emergence of financial planning business model providers in the industry, namely the multi-product, wrap and multi-manager platforms. “The FIMM has also consented that the annual fee for CUTA to be reduced to RM500 from RM2,000 (subject to approval from the Securities Commission),” said Wong.

The Securities Commission (SC) believed that one of the methods to protect consumers is preventing remuneration structures that may create conflict of interests and affect quality of advice, said Norlin Fatima Albakri, SC senior manager, market development strategy and development.

“Although the financial planning industry is relatively young here compared to the UK and Australia, issues such as robust conflict management; suitability of advice; and documentation and processes of the financial planning firms have to be addressed now for the medium- to long-term prospect of the industry.”

Currently, there are about 3,700 CFPs. As at end June, only 272 are licensed representatives of the CMSL for financial planning with the SC, but the number has increased by 54.5% compared to end-2007.