SC Chairman: Professionalism, Duty Of Care And Taking On Innovation Needed To Allay Uncertainties

Malaysia is not immune to external headwinds. With global growth anticipated to moderate in the coming year, a challenging and uncertain environment lies ahead.

It is imperative that the industry remains vigilant to prepare for every eventuality. Malaysian businesses and all stakeholders must maintain high standards of professionalism, upholding duty of care and embrace innovation to handle the risks ahead an stay resilient in the face of oncoming challenges.

In a keynote address at the Malaysian Financial Planning Council Professional & Ethics Forum 2022 on Thursday, Securities Commission Chairman Dato’ Seri Dr. Awang Adek emphasised three key areas which will ensure a well-prepared and thriving financial planning industry for the long term.

The financial planning industry must remain vigilant to prepare for any eventuality and ready to handle the risks ahead, he said.

The first key principle is professionalism. This will ensure clients trust that the best possible outcome will be delivered, irrespective of any situation. Stronger client relationships are created when financial planners behave professionally in providing their services. This will ensure clients trust that the best possible outcome will be delivered, irrespective of any situation, including market movements.

As per the Securities Commission Malaysia’s conduct guidelines, intermediaries are expected to uphold good practices centred upon fair treatment of clients. This involves acting honestly, fairly, and in the best interests of clients.

The second key principle is upholding of care to provide quality advice to clients. It is fundamental that financial plans consider clients’ unique needs and circumstances. This includes ensuring that vulnerable investors are catered for, especially at the planning and distribution stages of the product lifecycle. For distributors, training and guidance are needed to identify, assess and address investor vulnerability through clear communication.

“For the SC, the notion of a vulnerable investor is a key priority to ensure a more inclusive capital market,” Awang Adek added.

The third key principle is embracing innovation to enhance effectiveness and efficiency and better serve clients. Financial planners, in his case, need to embrace technology to better serve clients. Digital tools can enhance the effectiveness and efficiency of services. They would also appeal to more technology-savvy investors, such as the younger generation.

In fact, a survey by the Institute of Capital Market Research (ICMR) highlighted that millennials and Gen Zs are more inclined to use robo-advisory services. But as their portfolio grows, they would prefer to interact with a human advisor.

This suggests robo-advisory services can be complementary tools to financial planners to get more people to start investing early. Planners can then deliver more personalised services that requires a human touch. This is especially as investor needs evolve and grow more sophisticated over time.

Awang Adek also made a call to all planners and advisers to uphold the highest standards in carrying out their duties. Do not lose sight of responsibilities. This includes protecting clients and ensuring they do not fall prey to unlicensed schemes and activities.

Scams are a menace of great concern and must be eradicated to avoid losses – financial as well as reputational.

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