SC, BNM TO CONSOLIDATE LICENSING REGIME BETWEEN FINANCIAL PLANNERS AND ADVISERS

KUALA LUMPUR, Sept 21  -- The Securities Commission (SC) will conduct a joint review with Bank Negara Malaysia (BNM) towards consolidating the licensing regime between financial planners (FPs) and financial advisers (FAs), which are regulated by the SC and BNM, respectively.

The review is taking into consideration that a sizeable number of FPs and FAs are dual-licensed today and therefore subjected to dual regulations, the SC said in its Capital Market Masterplan 3 (CMP3) report released today. 

"This will enable the consolidated FPs and FAs to offer a wider range of financial advisory and planning services to consumers and investors, as well as reduce the regulatory costs for intermediaries," it said. 

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To facilitate the spectrum of investment advisory models in Malaysia, the regulatory framework need to evolve, the commission said. 

This entails a more streamlined and modularised licensing regime, complemented by regulations and regulatory expectations on the various types of advisory models that are clearer and more distinct. 

"There are also various other factors to be considered, including the implications on current business models in the market, commercial viability and talent needs. 

"Moving forward, an extensive regulatory industry collaboration will be fundamental to shape the investment advisory landscape," it added.

The SC noted that as the Malaysian investor landscape continues to mature, there will be a need for a greater variety of investment advisory models in the market.

"While FPs and digital investment management (DIM) have made advisory services accessible to more Malaysians in recent years, more can be done to strengthen investment advice offerings to better empower Malaysians to make investment decisions for their future. 

"This includes allowing investment advisory models to evolve and thrive in Malaysia, thus raising the bar on the quality of investment advice," it said. 

According to the SC, as the industry evolves in complexity, especially in aspects of retirement, there is greater demand for personal advice – one that prioritises outcomes for individual investors vis-à-vis their risk profile and helps them meet their investment goals.

 "In cases where advisors are unlicensed, investors risk getting poor advice and making uninformed investment decisions," it said.

-- BERNAMA