It is no secret that the financial planning industry will have to go through a digital overhaul. Marshall Wong, a licensed financial planner at FA Advisory Sdn Bhd who goes by the moniker Plannerd, shares that the adoption of technology has increased significantly, from how financial planners communicate with clients to methods that people use to invest.

The purchase of financial products — such as those from insurance companies and fund houses — can now be done remotely, making it easier for financial planners to offer them to their clients, says Marshall.

Covid-19 has also become a catalyst for all financial planners to rethink their online presence. Besides maintaining the connection with their clients offline, financial planners also need to make their presence felt online to counter non-licensed financial gurus who have popped up during the pandemic, says Marshall.

“Licensed financial planners don’t really have a strong online presence compared with financial gurus who are not licensed, and there is no legal requirement to become a financial educator. Some financial gurus are asking people to invest their savings in the EPF (Employees Provident Fund) without understanding their current financial position; this is very risky for the investor and is not right.

“So, as financial planners, we will need to step up our online game to reach out to people and provide correct information because, whatever advice we give, we owe our clients a fiduciary duty and we have their best interest in mind,” Marshall stresses.

Having an online presence also secures a financial planner’s “digital trust”, he says, because people generally look up a financial planner’s profile before engaging him or her online. This provides opportunities for financial planners to reach those who are based farther away. “I managed to onboard a client from Melaka during this period,” says Marshall.

Robo-advisers gained popularity during the MCO period, especially among the younger generation. Marshall says a financial planner must understand how robo-advisers work and see how he can use them to complement his services instead of competing with them. “What I believe is robo-advisers can be a part of the financial planning tools — meaning, a financial planner can suggest a robo-advisory investment method if the need fits.”

During the MCO, Marshall started creating more content for his blog and social media pages. From there, he learnt that people valued content on financial awareness, such as how to claim unclaimed money.

According to analytics generated on his various platforms, Marshall has managed to capture the younger market — those aged between 25 and 34 — which accounts for 40% of his online views.

Generally, financial literacy and awareness have improved this year. Kevin Neoh, a licensed financial planner at VKA Wealth Planners Sdn Bhd, shares that, with many financial services going online, people have the luxury of choosing the best option. These range from different pages and closed groups on social media to a variety of financial influencers on social media delivering videos, articles and free tools.

“While this is a good development, we have to be cautious about the source of information and content. Care has to be exercised, as some ‘freemium’ models may actually prepare you to sign up for courses or masterclasses that do not have a graduation date,” he says.

There has also been a rise in influencers, which can sometimes blur the line between those with personal experience and qualified professionals, especially on the subject of financial journey. Neoh says it is critical for consumers to acknowledge that each of us has different worries, fears and aspirations and is in different life situations.

There has been a shift in people’s mindset, where they are now placing emphasis on improving their life with the money they have in hand instead of focusing on products. “Compared with before, when people would typically ask, ‘What is the best investment for me?’ or ‘What kind of insurance is best now?’ emphasis on products is less now. Instead, clients are asking, ‘What should I do to improve my life with the money I have?’” says Neoh.

There is a movement among the global financial planning community to provide life-centred planning. This means that, to have a complete life, a client must do well in other areas of their life as well and not just in their financials.

“Financial planners who work with their clients to plan holistically will pay equal attention to other areas of their clients’ life, including career, health and relationships. The whole planning process will see me engaging the client in a deep conversation on the possibility of improving each area of his or her life, so that the client will inch towards a more fulfilled life.”

This year, it was reported that financial planners would be allowed to provide advisory services on investments such as stocks and bonds in the near future, instead of just recommending financial plans, insurance policies and unit trust funds.

The initiative to expand the scope of financial planners was announced by the Securities Commission Malaysia during the annual Signature Financial Planning Symposium organised by the Financial Planning Association of Malaysia on Oct 11.

Ian Wong, a licensed financial planner and partner at IPP Financial Planning Group, says most of the time, a person would engage intermediaries from different financial services. This can lead to coordination issues, owing to the differing philosophies of the different intermediaries.

Ideally, one’s financial plan should have a clear direction and strategy. Thus, allowing financial planners to provide advice on stocks and bonds is a good initiative to provide the man in the street with a more comprehensive financial portfolio, he says.

Financial planners need to be aware, however, of how they can do their jobs effectively, says Ian. He believes their key role is to provide clients with clarity on the state of their finances. A financial planner should not cross the line and become a remisier or stockbroker, as the time commitment required to excel in one job would be detrimental to the other, he adds.

“Currently, if a client were to ask me about a specific stock, I’d only be able to advise him or her on the general approaches — being very careful not to say buy or sell. [With the new regulation,] I will be allowed to highlight and discuss specific stocks with the client, including whether to buy or sell.

“But I should not be focusing on stock advising, as that would require me to monitor the stock markets diligently. If it does end up like that, then I would not be a financial planner anymore. I would be a stockbroker,” says Ian.

“At the end of the day, it’s about ensuring that the main focus of our service can be conducted properly — basically, the planning and advising of our clients regarding all aspects of their personal finance. If the client wants advice on stocks, we should most definitely weigh in, but I think financial planners need to be careful that they do not become full-time stockbrokers.”