KC Lau: Money Problems, the Root Cause of Most Social Problems

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Data from the Malaysian Department of Insolvency revealed an average of 18 people were declared bankrupt every day in the first five months of 2022.

According to the data posted on the department’s official website, 2,694 persons were declared bankrupt between January and May 2022. This means the number of bankruptcies in the country has increased to 274,628 people.

This is alarming! It leads to the question of the importance which needs to be placed on personal financial management.

No stranger to the world of personal financial management, financial author, educator and trainer KC Lau has made his name in garnering a group of loyal followers.

Speaking to BusinessToday, in an exclusive interview, KC Lau discussed the values behind personal financial management which has gained him the accolade for “financial guru” by many Malaysians.

BT: What made you go into the realm of wealth planning or rather what factors developed your interest in financial advisory?

KC: Money problems are usually the root cause of the majority of social problems we see today, for example, the rise in divorce rates, bankruptcy, crime and other social ills. The first non-fiction book I read other than textbooks is a personal finance book. And, I was inspired to be money-savvy.

Financial independence is the most important goal one should achieve as it allows you to do what matters in life. Ever since then, I have studied, and continue to learn about the subject of financial planning and wish to help more people to master their finances. I am sure if there are more ‘money-smart’ people, the world will be a better place.

BT: What makes a good Financial Advisor, in your mind? How would you define one?

KC: A good financial advisor always puts the client’s financial interests first, before his or hers. For example, a good advisor should recommend products that are best suited to the client’s capacity or affordability. But most of the time, financial advisors earn commission from the products they recommend. So, it has a conflict of interest.

In this situation, many advisors will recommend products that have the best pay off package for their sales.

BT: What qualities or traits are needed to be a great Financial Advisor? What would you deem as the main factors towards succeeding in the industry?

KC: Although financial advisors sound like other professionals, like lawyers, doctors and accountants, the sales process is totally opposite.

Nobody will line up at your door to pay for your financial advice, unlike what we see at medical clinics. So, it still comes down to a person’s salesmanship and communication skills.

To be successful in this industry, a financial advisor needs to have the two main skills — technical knowledge to introduce suitable plans for the client and people skills to close more deals while convincing the client on the benefits of executing the plan introduced. 

BT:  Describe your daily routine as a financial advisor?

KC: I no longer provide financial planning service. My business is now providing financial literacy programs. When I was an active financial planner, I spent 50% of the time doing prospecting (finding new customers).

BT: What are the real experiences which stand out for you in relation to being a financial advisor?

KC: Am not sure how to answer this as I had a wide array of experiences.

BT:  The role may be stressful at times, as risks are involved, what makes such situations better? What are the strategies, mindset or action needed when one is performing in this role?

KC: Do what is best for the clients. 

BT: What is your message to the youth of Malaysia?

KC: Save early, and invest for the long term.

BT:  How do you stay motivated in your work?

KC: I don’t need motivation to work when it is something I enjoy doing.

BT:  What is your investing philosophy?

KC: I practice value investing. I love to buy assets (stocks or properties) that are of good quality, with highly predictable profitability, and keep it for the long-term.

I will invest more when high quality assets can be bought at a bargain prices, especially during economic downturns.

BT: Describe a time when you failed in this role and the lesson learnt?

KC: There was a period when I sold products that were good for my own pockets (high commission) but not necessarily good for the customers. I realise that our commission is short-lived. But the relationship with customers is long-term. We cannot stay in the industry doing this all the time. Clients will get smarter and they will leave.

BT:  What are the main areas of investment or similar opportunities presently under the current market in Malaysia?

KC: I invest mainly in my own business, property and the stock market. Basically, I ignore the macroeconomic news and situation because those are not things we can control.

It is also extremely hard to get the timing right. So, my approach is always from the bottom –up – to find good assets at a good price.

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