Investors will be able to invest in private retirement schemes (PRS) through a user-friendly mobile application moving forward.
Advisonomics, a licensed financial planning firm based in Kuala Lumpur, has signed a memorandum of understanding (MOU) with the Private Pension Administrator (PPA) to pave the way for Malaysians to digitally set up a PRS account and invest in PRS funds through its Cashku mobile app.
“The app will offer a direct debit solution where investors can move funds from their bank accounts to their PRS accounts automatically. Such a seamless process aims to make things easy for [PRS] contributors,” says its co-founder Raevendren Ramachandran.
He adds that Cashku will give investors more autonomy over their PRS accounts as they can monitor and manage them with the app.
Further down the road, investors can expect to invest in other unit trust funds with as low as RM10 via the app.
Raevendren is a former director of institutional investment at asset management firm Areca Capital Sdn Bhd, and has been involved in various advisory roles with a specific focus on tailoring solutions for high-net-worth investors and family offices, according to the company's official website.
Meanwhile, a PRS is a voluntary contribution scheme that helps investors accumulate more savings for their retirement. Those who invest in the scheme are entitled to personal tax relief of up to RM3,000 each year until 2025.
Commenting on the MOU, PPA chief executive officer Husaini Hussin says that it is the organisation's first-ever partnership regarding distributing PRS through a mobile app.
“With Cashku, we are looking to increase awareness and accessibility to retirement planning with PRS, and consequently grow our contributor base, especially by attracting the younger generation to start saving for their retirement,” he says.
Raevendren points out that 48% of Employees Provident Fund (EPF) contributors have less than RM10,000 in their accounts, according to the EPF, which is worrying.
“This is an alarming sign, and we feel compelled to urgently push the message [to the public] about the importance of having sufficient retirement savings.
“We hope the MOU between Cashku and PPA will encourage people to build their retirement savings through PRS. The monthly direct debit feature [built into the app] would take some hassle out of retirement planning,” he says.
As at Aug 19, a quick check on the ground showed that the Cashku app is ready for download on the Apple App Store and accepts registration. While investors can’t invest in PRS yet, they can check out financial literacy courses through the app.