Vol 10, No 3 - Financial Planning Association of Malaysia

4E JOURNAL
Education • Examination • Experience • Ethics
The official publication of the Financial Planning Association of Malaysia
KKDN PP 11977/05/2011 (029485) Vol. 10, No. 3, 3Q 2010
The Psychology
of Retirement Planning
Bullet Proof Your
Retirement (Part II)
Of Double-Dip and
Macro Rebalancing
The Ageing
Phenomenon
Malaysia
in
Challenges and Opportunities
Everyone Can
Retire Well
www.fpam.org.my

CONTENTS
July - September 2010
In this Issue
COVER STORY
The Ageing Phenomenon
in Malaysia:
Challenges and Opportunities
The ageing population in Malaysia, like many other Asian
countries, is increasing rapidly and the rate of increase is
faster than most Western countries. This phenomenon, whilst
creating socio-economic challenges for the government, is at
the same time creating new business opportunities.
p 14
Everyone Can
Retire Well
INDUSTRY
Malaysia’s First Licensed Islamic Values
Based Financial Adviser Firm FSA
Commences Business
Bullet Proof Your Retirement (Part II)
ISLAMIC FINANCE
The Doctrine of ‘Aul and Its
Impact on Estate Planning
BUSINESS MODEL
Building a Professional Business
the MAAKL Way
Building on the Right Platform
ECONOMY
Of Double-Dip and Macro Rebalancing
NEWS IN BRIEF
PINDOSF: For Investors
with Aggressive Risk Appetite
Empowering Investors
with i*TradePro@CIMB
CIMB Group Integrates
Transaction Banking Regionally
CHAPTER ACTIVITIES
Constantly Educating the Public
Upcoming Chapter Events
CFP CERTIFICATION GLOBAL UPDATES
CE COURSES
p 26
11
34
8
44
48
5
38
39
39
37
37
40
51
, CERTIFIED FINANCIAL PLANNER® and are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd. Financial Planning
Association of Malaysia is the marks licensing authority for the CFP marks in Malaysia, through agreement with FPSB.
Copyright 2010 © Financial Planning Association of Malaysia. All rights reserved. (KKDN PP 11977/05/2011) No part of this publication may be reproduced, stored in
a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the written permission of the
publisher. All information provided in this publication are for the purpose of education and keeping the members of the Financial Planning Association of Malaysia
and the general public informed of news, developments and direction in the financial planning industry. No article published here is exhaustive on the respective
subject it covers and is not intended to be a substitute for legal and financial advice or diminish any duty, statutory or otherwise imposed on persons by existing laws.

EDITORIAL
Editorial Board
Dear Members,
Preparing
for Retirement
In the last edition of the 4E Journal, I mentioned briefly of our upcoming Everyone Can Retire Well
Conference and Exhibition 2010. Well, this FPAM event of the year is only a few days away and I hope
you are attending so as not to miss the many benefits it is offering.
The conference proper is a gathering for financial planning practitioners, policymakers, financial
services and product providers, academics, and the professionals who are in related sectors to come
together to share their findings, challenges, proposals and viewpoints with one another to better
address the issue of retirement in Malaysia. In this respect, we have invited several foreign and
renowned local speakers to share their experiences and knowledge.
Over the two days of the conference, there will also be public talks on the various components of
retirement planning including the financial, health, social and psychological aspects. These talks,
together with an exhibition, will be free and open to the public. They aim to inform and educate
the public on the options available to them to ensure that they enjoy their retirement years and
contribute to society. I hope you invite your many clients and friends to attend these free talks.
One feature, which I believe would be a hit with visitors is the EPF Mobile Team and booth. They
will be at the conference to facilitate the public wishing to register for i-Akaun, obtain statements,
withdrawal forms, nominate beneficiaries, make general enquiries or simply obtain brochures on
EPF-related information.
I would like to thank the co-chairmen of the conference, Tan Beng Wah and Badlisyah Abdul Ghani
and their team for their untiring efforts in making this conference a success. Many thanks are also
due to the staff of FPAM and volunteers without whom the endeavour of this magnitude would not
be possible.
Meanwhile, the Association will be moving to a new premise at Phileo Damansara. This move would
cut our office rental by more than half while providing for a slightly bigger office space. The new
address is: Financial Planning Association of Malaysia, Unit 1109, Block A, Phileo Damansara II, Jalan
16/11, 46350 Petaling Jaya, Selangor Darul Ehsan.
On September 28, FPAM commenced a job analysis survey. The objective of the survey is to
determine which financial planning competencies, skills and areas of knowledge are important,
and which ones are actually being used. A detailed questionnaire was developed for the survey.
The results of the survey will be used to determine the content of the final examination for CFP
candidates and the weighting of the various topics. I hope all of you will spare the time to answer
the survey questions should you be selected as one of the respondents.
We have also just concluded a networking event themed “China Nite 2010.” Members had the
opportunity to listen to two speakers on Global Market Outlook and Investing in China. And on
October 19, FPAM in collaboration with Smart Investor and Mazda will be jointly hosting a networking
gathering at the new Tropicana City Mall in Petaling Jaya. I hope members will take advantage of this
event to make new friends and build your business network. As usual, further details are available at
our website at: www.fpam.org.my.
Publisher
Financial Planning Association of Malaysia
Editor
Dennis Tan
Managing Editor
Steven K C Poh
Advisor
Steve L H Teoh
Editorial Panel
Tan Beng Wah
K P Bose Dasan
Kong Kim Heng
Maznita Mokhtar
Administration & Advertising
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The 4E Journal is published quarterly by the
Financial Planning Association of Malaysia.
Opinions and views expressed in the 4E Journal
are solely the writers’ and do not necessarily
reflect those of the Financial Planning
Association of Malaysia. The publisher accepts
no responsibility for unsolicited manuscripts,
illustrations or photographs. All manuscripts
and enquiries should be addressed to:
The Editor, 4E Journal,
c/o Financial Planning Association of Malaysia,
Lot 16.02, 16 th Floor, Block B, HP Towers,
Jalan Gelenggang, Bukit Damansara,
50490 Kuala Lumpur.
Phone: +60-3-2095 7713
Fax: +60-3-2095 7719
On behalf of FPAM, I would like to take this opportunity to thank all the sponsors for their continued
and generous support in all our functions and events.
See you all at the conference!
Wong Boon Choy,
President
president@fpam.org.my
www.fpam.org.my

ECONOMY
July - September 2010
Of Double-Dip and Macro Rebalancing
By Anthony Dass
Brewing risk of a potential
double-dip
The worst of the global economy from
the economic crisis viewpoint has been
avoided as a result of prompt and massive
worldwide stimulus policy. Global growth
for 1H2010 was in a firmer footing,
resulting in the upgrading of global
growth by the International Monetary
Fund (IMF) to 4.2 percent from its earlier
projection of 3.9 percent (-0.6 percent in
2009).
Even so, new fears have started to emerge
as we draw closer to 4Q2010. First, it has
become more glaring that neither the
European sovereign debt crisis nor the
banking sector crisis has been resolved
as both mutually reinforced each other.
While the authorities needed to backstop
banks, the banks themselves owned large
amounts of peripheral government bonds.
Clearly, the obstacles to a real solution for
the banking and sovereign crisis were
formidable.
The brief breather from the stress test
in July was perceived to be the circuitbreaker
which provided transparency
on the banks’ exposures and served
as a catalyst for consolidating and
recapitalising the banking system.
Investors, however, are doubtful about
the stringency and relevance of the
test. As such, buyers of the Greece
government bonds still revolved around
the European Central Bank (ECB). Also
investors are still wary of Ireland’s
government bonds in view of the state of
their banks, which are still in substantial
difficulties. Portugal’s government bonds
are trading at their widest spreads over
Bunds (German bonds); and many
European banks are still depending on
ECB for liquidity support.
The U.S. economy, meanwhile, has
entered into a rough patch, but analysts
believe it will only be temporary. Still,
downside risks are evident for the near
term. Hence, the U.S. Federal Reserve has
shifted its focus from an exiting strategy
to the possibility of doing more by: (1)
buying more securities;
(2) committing to lower
policy rates for a longer
period; and (3) reducing
the interest rate on bank
reserves.
This simply means its exit
strategy mode would
most likely be in 2011. But
the risk of a double-dip
recession is flaring, with the
odds rising quickly. The U.S.
1H2010 real gross domestic
product (GDP) was below
trend, with expectation of
a much slower growth in
2H2010. And even if the
economy technically avoids
a double-dip, we believe
poor job creation; rising
unemployment; larger
cyclical budget deficits; a
further fall in home prices;
and banks’ larger losses
on mortgages, consumer
credit and other loans
would create the uneasy
recession feeling.
China’s policy tightening
to deal with its economic
overheating and the rise in goods and
asset inflation are showing signs of
slowing down growth. Also, the growth
slowdown of advanced economies and
the weakening of the euro will further
dent Chinese growth in 2H 2010. Simply,
this means the world’s leading growth
locomotive would slow down its growth
from above 11 percent to 7 percent rate
by end-2010. Such a scenario would be
bad news for export growth for Asia as
well as other commodity exporters who
have been relying on China’s imports.
An important victim from a slower Chinese
economic growth will be Japan. Domestic
demand remains weak as real income
growth is anemic. Japan is seen to be
relying heavily on exports to China for its
economic growth. That’s not all. Japan is
also expected to suffer from low potential
growth as a result of the lack of structural
Buyers of the Greece government bonds still revolved
around the European Central Bank (ECB).
reforms as well as ineffective government,
reflected by the frequent change of Prime
Ministers (four Prime Ministers in four
years and compounded by large public
debt, ageing demographics and the
strengthening yen.
Clearly, the fear of double-dip is
accelerating. Should the U.S. economy
expand at a mediocre 1.5 percent, while
both Europe and Japan grow closer to
zero than 1 percent, and China sees a
slower growth of below 8 percent, it will
create a strong feeling of a double-dip.
Any additional shock would then push
the fragile global economy’s growth
close to stall speed and into a full-fledged
double-dip. Should this happen, we can
expect the sovereign problems in Europe
to deteriorate further, thus leading
into another round of risky asset-price
correction, while global risk aversion and
The 4E Journal 5

volatility will hurt the region and the
world.
A vicious circle of asset-price correction
leading to weaker growth and in turn
downside surprises to growth, which
are not currently priced by markets and
causing further asset prices to fall would
tip the global economy into a global
recession like what happened in 2008-
2009. Also, the risk of a possible war in the
Middle East between Israel and Iran could
send oil prices skyrocketing. Should this
happen, it will drag the global economy
into a recession.
Policymakers are also bankrupt of ideas.
Should the risk of a double-dip arise,
additional quantitative easing may not
mean much. And room for further fiscal
stimulus by most advanced economies
is limited. The big bailout of financial
systems is also limited by the fiscal strains
of many sovereigns.
The ‘V-shaped’ recovery illusion has
vanished. We are now looking at best
a ‘U’ shaped growth for the advanced
economies, with Europe and Japan
possibly stretching into ‘L-shaped’ near
depression. The advance economies are
expected to struggle in order to avoid
a ‘W-shaped’ double-dip recession. This
means, even the ‘V-shaped’ recovery
from the stronger emerging markets are
expected to be dented by their strong
dependence on the advance economies
whose economic growth is expected to
be weak.
Increasing need for macro
rebalancing of ASEAN
economies
The 2008 financial crisis in the developed
world had some resemblance to the ASEAN
financial crisis of 1997/98. Among them:
• the large current account deficit due
to overinvestment by corporations
triggered the ASEAN crisis, while
the 2008 crisis saw excessive
consumption by households in U.S.
• the surge in liquidity into ASEAN prior
to the 1997/98 crisis as a result of
global capital market development
and short-term capital inflows
took advantage of the managed
exchange rate policy and incomplete
sterilisation, while in the U.S. the
consumption was largely funded
by excess liquidity which fuelled
economic growth
• a combination of financial institutions,
moral hazard and regulatory
frameworks spurred liquidity into
ASEAN and the U.S., which in turn led
to misallocation of resources, credit
and debt as well as asset bubbles.
Today, advanced economies remain
weary about issues like: (1) consumer
deleveraging in the U.S.; (2) contagion
effects of sovereign debt in Europe; and
(3) the weak Japanese economic recovery.
On the other hand, ASEAN policymakers
are focusing on their healthy macro
balance sheets which were restored
following the 1997/98 financial crisis.
While it is great for ASEAN to have
deleveraged, the situation remains a
cause of concern when looking forward.
After having addressed the issue of excess
demand prior to the Asian financial crisis,
ASEAN’s growth now hinges heavily
on exports in the post 1997/98 crisis. It
has corrected the excesses in the nonhousehold
private sector by deleveraging:
• bank credit as a percentage of GDP
shrank between 1997 and 1Q2010
(Indonesia: 47.5 percent of GDP in
1997 to 12.8 percent in 1Q2010;
Malaysia: 101.2 percent in 1997 to 51
percent in 1Q2010; Singapore: 68.9
percent in 1998 to 55.3 percent in
1Q2010; and Thailand: 142.2 percent
of GDP in 1997 to 67.4 percent in
1Q2010)
• decline in private external debt
(Indonesia: 86.3 percent of GDP in
1998 to 12 percent of GDP in 1Q2010;
Malaysia: 53.9 percent in 1997 to
29.1 percent in 1Q2010; Thailand:
65.6 percent in 1998 to 20 percent
in 1Q2010). But with the risk of a
potential global double-dip flaring,
coupled with the recent relaxation of
the Chinese Renminbi, the possibility
for ASEAN’s structural exports to
dampen remains high. This means
ASEAN will have to move away from
their over-reliance on exports, going
forward.
Although the scenario of a double-dip is
not our base case, we believe ASEAN would
need to rebalance. And it should come
through investment as its trade surpluses
did not come from poor consumption but
rather weak capital expenditure (capex).
For instance, Malaysia’s private investment
capex was at 10.9 percent of GDP in 2004-
2007 versus 30.5 percent in 1994-1997,
while Thailand’s private investment capex
stood at 16.1 percent of GDP in 2004-
2007 against 18 percent in 1994-1997.
With capex in 2004-2007 being below
the pre-1998 levels, it denotes that macro
rebalancing via investment will be carried
out through more productive and nonspeculative
investment, going forward.
“The risk of a possible
war in the Middle East
between Israel and Iran
could send oil prices
skyrocketing. Should
this happen, it will drag
the global economy into
a recession.”
6 The 4E Journal

three times, each by 25 basis points (bps)
to the current 2.75 percent. While some
quarters expect another 25 bps hike in
2H10, we believe the central bank has
ended its monetary tightening for 2010.
Whether Bank Negara decides to raise
the OPR by another 25 bps or leave it
unchanged at 2.75 percent for the rest of
2H2010, we believe the overall monetary
policy remains accommodative and will
stay below the ‘natural’ level of 3.5 percent.
The government would also need to rationalise the subsidy system which has impeded the country’s progress on the
competitiveness front.
Also, the weak capex was also a result
of savings being channeled abroad and
not into domestic investment, although
ASEAN enjoys high domestic savings.
Comparing ASEAN economies’ savings visà-vis
other economies of similar income,
ASEAN’s gross domestic savings rates are
much higher – suggesting a good scope
for consumption as a rebalancing tool.
We feel the scope is bigger for Singapore
which is already a high-income economy
when compared to economies like
Malaysia, Indonesia and Thailand. Since
savings has a positive relationship to the
economy’s income level, it clearly suggests
why the lower-income economies suffer
from the dilemma of needing investment
to ‘take off’ but lacks savings to finance it.
On that premise, as opposed to increasing
consumption, countries like Malaysia,
Indonesia and Thailand would be in a
better footing to tap on their high savings
to increase investment and potential
growth.
But the macro rebalancing is expected
to differ amongst the ASEAN economies.
Economies like Indonesia and Thailand
will need to have a greater rebalance
and move towards a stronger domestic
demand base in view of their large
economic structure and population size
when compared to Malaysia. On that note,
we believe rebalancing via investment
as opposed to consumption would be a
more viable strategy.
Singapore, on the other hand, will be able
to rely on exports as its strategy in view
of its small economic size and population.
While they could focus on consumption,
it will be less effective in view of its
small domestic demand. So, instead of
rebalancing from exports to domestic
demand, they should focus on moving
away from traditional export markets in
the developed economies to new export
markets in the developing world.
Looking at the rebalancing strategy,
Indonesia and Singapore are ahead
of Thailand and Malaysia. The reason:
Indonesia is enjoying smaller current
account surplus, while its gross fixed
capex in the period 4Q2009-1Q2010 rose
to 31.6 percent of GDP from 23.8 percent
in 2004-2007 as a result of the structural
decline in the cost of capital. Singapore
has already started to focus on new export
areas. But Thailand’s fixed capex ratios fell
further to 23.8 percent of GDP in 4Q2009-
1Q2010 from 27.3 percent in 2004-2007. It
could be attributed to its political climate,
which if it improves would spur further
investment. As for Malaysia, it fell to 18.6
percent from 20.9 percent.
Much will depend on the policymakers’
will power to execute their plans, like
shifting their focus from physical to nonphysical
infrastructure like education
to create a quality labour force for the
country to unleash its potential growth
and drive its economic transformation.
The government would also need to
rationalise the subsidy system which
has impeded the country’s progress on
the competitiveness front. This would
help jumpstart the private investment
momentum from both local and foreign
investors.
Cyclical recovery for Malaysia
Economic consolidation for the Malaysian
economy is underway, now that the
economy is clearly out of the woods.
Bank Negara Malaysia (BNM) started to
normalise its monetary condition by
raising the overnight policy rate (OPR)
Meanwhile, the consolidation of public
economy is progressing at a gradual
pace in 2010 with budget deficit/GDP
projected to ease to 5.3 percent in 2010
and 4.9 percent in 2011 from 7.4 percent in
2009. The modest consolidation of budget
deficit/GDP, in our view, is partly due to the
slower than expected rationalisation of
subsidies. Just like the goods and services
tax (GST) which has been temporarily
shelved, the removal of subsidies could
also follow the same direction. We found
that for every 1 percent reduction in
subsidy, the budget deficit would drop by
approximately 0.2 percent.
The risk for real disposable income to
erode, following the removal of subsidies,
remains high, and could have a strong
backlash for the authorities. Such risk
is not surprising given that fuel and
food make up 32 percent and 4 percent
respectively of the RM74 billion total
subsidy in 2009 are the target areas. Other
areas of subsidy like welfare, education
and healthcare account for 58 percent of
the total subsidy bill in 2009. The subsidy
for infrastructure (6 percent) will continue.
We believe the economic growth drivers
in 2010 and 2011 will come from cyclical
factors – manufactured exports, private
expenditure and positive terms of
trade from elevated commodity prices
– and they are expected to spearhead
domestic demand in 2010 and 2011.
Complementing the cyclical drivers will
be the modest fiscal consolidation. Hence,
our real GDP projection for 2010 and 2011
is 6.7 percent and 6.3 percent respectively.
While acknowledging a cyclical recovery,
our concern remains with structural issues
that could undermine medium- and longterm
growth. Underpinned by an uneven
track record for reform, our main concern
is policy execution. Without fully executing
the blueprints of the 10th Malaysia Plan,
we fear it will remain a mere ‘plan.’ But if
well executed, we believe the long-term
structural issues will improve, mitigating
the short-term growth impact.
Anthony Dass is the Research Advisor of
Inter-Pacific Research Sdn Bhd.
The 4E Journal 7

ISLAMIC FINANCE
July - September 2010
The Doctrine of ‘Aul and
Its Impact on Estate Planning
By Azman Ismail
“A particular aspect
that has attracted
attention among
financial planners is
the one related to the
distribution of estate in
Islam. This is especially
true among those who
specialise in estate
planning.”
The awareness and interest in Islamic
financial planning has grown
steadily and there are now many
financial planners who have attended
the Islamic Financial Planning courses.
A particular aspect that has attracted
attention among financial planners is
the one related to the distribution of
estate in Islam. This is especially true
among those who specialise in estate
planning. However, there are only a few
financial planners who are involved in,
more so who understand, the various
components of Islamic estate planning
especially the one related to the Islamic
law on distribution of estate. (For an initial
understanding of the subject see author’s
article, ‘Faraid – The Missing Link’, Personal
Money, February 2003)
One aspect of the Islamic law of
distribution that will have an impact on
estate planning relates to the distribution
of estate; where when the shares of the
Quranic heirs (i.e. heirs that are determined
by the Quran) are added together, the
sum equals to more than one. To solve
this problem, Muslim scholars resort to
the doctrine of ‘aul. ‘Aul literally means
“increase” and the doctrine of ‘aul states that
when the shares allocated by the Quran
to the various heirs when added together
amounts to more than one, their shares are
subjected to a proportionate abatement
by increasing the common denominator.
What this means is that the shares of the
Quranic heirs are proportionately reduced
so that each heir now gets less than what is
mentioned in the Quran.
8 The 4E Journal

The doctrine of ‘aul was conceived possibly
in the sixty-fourth decade, several years
after the death of the Prophet Muhammad.
It was reported that during the reign of
Umar the second Caliph, he was asked to
judge on the distribution of the deceased’s
estate. The deceased left a husband and
two full sisters (i.e. sisters of the deceased
with the same mother and same father).
According to the Quran, the husband is
entitled to a half of the estate whilst the
two sisters are entitled to two-thirds of
the estate. The Quran says, ‘And unto you
belongeth a half of that which your wives
leave, if they have no child ….’ (Chapter
4, Verse 12) and ‘They ask thee for a
pronouncement. Say: God hath pronounced
for you concerning distant kindred. If a man
dies childless and he has a sister, hers is half
the heritage, and he would have inherited
from her had she died childless. And if there
be two sisters, then theirs are two-thirds of
the heritage…(Chapter 4, Verse 176)
“The doctrine of ‘aul was
conceived possibly in
the sixty-fourth decade,
several years after the
death of the Prophet
Muhammad.”
Now when we add the fractions together,
it is obvious that the total sum is sevensixth
(7/6). Caliph Umar, being a pious
man, did not want to take a decision that
seems to contradict the Quran and since
the law of estate distribution is a very
important matter, he consulted several
of the Prophet’s companions in line with
the Quranic verse, “Those who hearken
to their Lord, and establish regular prayer;
and who (conduct) their affairs by mutual
consultation…” (Quran, 42 : 28).
At that time Umar wondered whether he
should give to the husband his share first
and then give the balance equally to the
sisters; or should he give to the sisters their
share first and then give the balance to
the husband? If he were to implement the
former method, then the husband will get
a half of the estate and the sisters will get a
quarter each. On the other hand, if he were
to implement the latter method, the heirs
will get one-third each. Either way, each
of the heirs will not get his or her share
according to the Quran. Umar had possibly
wanted to proportionately divide the
estate but he needed other companions to
confirm this thought. He put forward the
issue by saying that he did not know which
of them God has preferred over the other.
Among the companions who attended the
meeting was Abbas bin Abdul Mutalib the
Prophet’s uncle, Saidina Ali the fourth Caliph
and Zaid bin Thabit the faraid expert. One of
the companions suggested that each share
be proportionately reduced and argued
that this does not go against the spirit of the
Quran. It was suggested in a hypothetical
proposition that if a man died leaving six
dirhams, and suppose that there were two
people claiming their debt from the estate
where one of them claims three dirhams
and the other claims four dirhams, what
would we have done? We would apply the
rule of bankruptcy and divide the dirhams
proportionately between the two. All the
companions present at that meeting agreed
and thus the doctrine of ‘aul was born. The
doctrine of ‘aul says that in the event where
there are several Quranic heirs surviving the
deceased and their fractional shares when
added together amount to more than one,
the solution is to proportionately decrease
the shares of each heir. This proportionate
decrease is done through the following
steps:
1. Get the lowest common multiple
(LCM) of the denominators of
the original fractional Quranic
shares. In this case, the LCM of the
denominators is 6 being a multiple
of 2 (the denominator for half, the
husband’s Quranic share) and 3 (the
denominator for two-thirds, the
Quranic share of the sisters.
2. Add the sum of the numerators. Since
the numerators are now 3 (1/2 = 3/6)
and 4 (2/3 = 4/6), the sum is 7.
3. Increase the denominator so that
it will equal to the sum of the
numerators. The denominator is
now 7.
4. Allow the numerators to remain.
5. The shares of the heirs are now the
new numerators (after the LCM
process) over the new denominator
i.e. 3/7 and 4/7.
In the above example, the husband would
get 3/7 instead of half and the sisters
would get 2/7 each instead of 1/3 each.
This doctrine has now been accepted by
almost all the Islamic schools of thought
including that of Malaysia. Therefore
Islamic financial planners in Malaysia and
elsewhere, and their clients, should take
into consideration this doctrine when
developing an estate plan for their Muslim
client. Otherwise, the actual amount that
the heirs will obtain will be less than the
amount required.
Let us take another example. Suppose
a man has a wife, parents and two
daughters. If the man were to pass away,
the wife would get one-eighth, the
parents one-sixth each and the daughters
get one-third each. These apportionment
are based on verses 11 and 12 of chapter
4 of the Quran. In verse 11, the Quran says,
‘…and if there be daughters more than two,
then theirs is two-thirds of the inheritance
and if there be one (only) then a half. And to
his parents a sixth of the inheritance…’. In
verse 12, the Quran says, ‘And unto them
belongeth the fourth of that which ye leave
if ye have no child, but if ye have a child then
the eighth of that which ye leave…’
Before applying the doctrine of ‘aul, the
sum of the Quranic shares is 27/24 i.e.
Father’s share + mother’s share + wife’s
share + two daughters’ share
xx
1/6 + 1/6 + 1/8 + 2/3
xx
4/24 + 4/24 + 3/24 + 16/24 = 27/24
When the doctrine of ‘aul is applied to the
above case, the shares of the various heirs
are as follows :
xx
4/27 + 4/27 + 3/27 + 16/27 = 27/27
The following table represents the shares
of the Quranic heirs before and after the
doctrine of ‘aul.
Quranic Heir
Father
Mother
Wife
Two Daughters
Share
Before
‘Aul
1/6
1/6
1/8
2/3
Share
After
‘Aul
4/27
4/27
3/27 = 1/9
16/27
Let us suppose that before applying the
doctrine of ‘aul, a client, in consultation
with an Islamic financial planner, has
determined that he ought to leave
RM180,000 for his family. Suppose he came
up with this figure with the assumption
that his two daughters will get twothirds
of his estate should he pass away.
Suppose also that his nest egg has already
accumulated RM 100,000 and he needs
another RM80,000 in insurance or takaful
cover. However, since he leaves behind a
wife, parents and two daughters, he now
needs an additional insurance or takaful
coverage of RM30,000 to fulfill the needs of
his family after his death. Confused? Don’t
be. Contact your Islamic financial planner.
(More cases of ‘aul can be found in the
book, “Perancangan Perwarisan Islam”
written by the author and published by
Amanah Raya Bhd.)
The author is the managing director of IIFIN
Consulting Sdn Bhd, a one-stop specialist
consultancy in Islamic finance and insurance.
The 4E Journal 9

Make Prudent Financial
Management a Way of Life
Financial Education
Get knowledgeable about
managing your finances
smartly.
Financial Counselling
Learn to put into action
your financial knowledge by
practising positive financial
habits daily.
Debt Management
Enjoy financial freedom
through your determination
and discipline.
10 The 4E Journal
www.akpk.org.my
1800-88-2575

Malaysia’s First
Licensed Islamic Values Based
Financial Adviser Firm FSA
Commences Business
INDUSTRY
July - September 2010
First Sovereign Advisory Sdn Bhd (FSA),
the first Islamic values based financial
adviser firm licensed by Bank Negara
Malaysia and the Securities Commission
in Malaysia, opens its business operations
on September 17, 2010 with the aim of
making financial freedom a reality for all
its clients through prudent and effective
financial planning.
A bumiputera controlled company, FSA’s
business model is based on a fair sharing
formula between FSA (the financial
adviser (FA) firm) and the financial adviser
representative (FAR) and/or licensed
capital markets services representative
(CMSRL). “It is a ‘win-win’ formula, proven
worldwide in bringing financial planning
to the community,” its chief executive
officer, Anuar Shuib said.
“FSA’s primary role is to provide an efficient
and effective platform for its FARs and
CMSRLs to practise financial planning by
providing a plethora of unique financial
products and services via strategic
partnerships with selected financial
institutions,” Anuar added. “That’s not all.
Our infrastructure also includes a topnotch
support system, IT system, client
data management system, continuous
knowledge and skills training, backroom
facilities, research and development and
strict compliance with regulators.”
“Financial planning is the heart and soul
of FSA,” Anuar pointed out. “We offer
prudent financial planning with an array
of other related services like portfolio
management and tax planning to our
clients. We also leverage our expertise
and resources with strategic alliances
that specialise in their respective areas
of expertise to give our clients the best
and most effective financial planning
services to get the intended results and
achieve their personal financial objectives,
and in the process, really a total financial
planning experience.
“At the retail level, we believe inflation,
interest rate and the economy will have a
direct impact on our clients’ financial future
and lifestyle,” Anuar said. “And as financial
advisors, we are entrusted with the
The FSA team with strategic partners and guest of honour Tun Dr Mahathir Mohamed.
responsibility to assist our clients in their
personal financial planning journey to
ensure they arrive safely at their intended
financial ‘destination.’ We do this by offering
them a comprehensive range of financial
solutions via our expert advisors as well
as designing tailor-made financial plans
to meet their unique needs. As an Islamic
values based financial adviser, we also give
our Muslim clients financial advice from
a Shariah perspective, which is an FSA
unique selling proposition. This includes
zakat planning as well as planning for the
hereafter as encouraged in the Quran.
Anuar: Financial planning is the heart and soul of FSA.
“As financial planners, I believe we also act
as a personal finance coach to our clients,
and collectively, I believe we have a nationbuilding
role to play as well. We are inevitably
and indirectly ‘entrusted’ with the role of
constructing the wealth management
blueprint for Malaysians,” Anuar said.
At the corporate level, Anuar said there is
now a renewed focus on the importance
of company financial planning. “There
are lessons to be learned from the recent
global financial crisis and companies are
now more aware of the need to be prudent
in their financial management as a way
to shield themselves from or minimise
economic damages,” he pointed out.
“Corporations now realise that there is more
to be achieved when practising sound
financial planning rather than avoiding it,”
he added. “The notion that corporations
can have consistent profitability without
proper risk management and investment
planning is now no longer relevant.
Corporations must understand that it is
their responsibility to exercise effective
corporate financial planning as it is the
key towards financial sustainability and
profitability. This is where FSA again
plays its role, and we believe we have the
necessary expertise to assist our corporate
clients in this endeavour.”
The 4E Journal 11

INDUSTRY
July - September 2010
Bullet Proof Your
Retirement Plan (Part II)
We have established in the
previous article that investing
is for the medium- to longterm
and what is key to accumulate your
retirement fund is to be discipline and
consistent. Through this approach and
cost averaging you will be able to lower
your total cost of investing. Make this
habit your second nature because you
stand to benefit!
So now that you know the recommended
approach to take in accumulating your
retirement pool, consider the next few
questions: How much is enough? How
best to determine what you need?
Through proper planning you will be
able to determine how much you actually
need and whether your current wealth
accumulation method is effective. Four
simple steps have been outlined below
for you to follow when planning your
retirement:
Step 1:
Set realistic goals on the retirement
lifestyle you are aiming for
• By setting clear goals and having a
plan to help you achieve your goals,
you will be able to start making
progress, in big or small consistent
steps, towards your retirement goal
and financial independence.
• Apply a strategy and stick with it.
• Make adjustments along the way.
Step 2:
Determine your financial requirements
based on your desired retirement lifestyle
• Make allowances for your daily
expenses, foreign vacations and big
item purchases or expenses.
• You should also take into
consideration the effects of inflation
on the value of your money, children’s
education, clearing your debts,
miscellaneous expenses such as
health and living costs, or expenses
related to unforeseen incidences.
Step 3:
Make an inventory of all your financial
assets and liabilities
debts like housing loans, car loans,
personal loans, credit card debt, etc.
• Get a clear picture of your financial
status which will determine the kind
of financial plan needed to secure
your future. Be honest!
Step 4:
Determine the amounts for cash savings,
investments and the rate of return you are
comfortable with.
• This will help you choose the type
of investments that will help you
achieve your goals.
• Start early, reinvest your gains and
benefit from the compounded rate
of return. You will be amazed at how
a small amount of capital invested on
a monthly basis over a period of time
will enable you to live your dream
retirement life!
• Use the rule of 72 to determine how
many years it will take to double the
value of your investment, assuming all
gains are reinvested. Take 72 divided
by the returns you are receiving per
annum. The answer indicates the
number of years it takes to double
your investment. Better still, through
smart investing plans, you can
possibly enjoy an early retirement!
Now, let us apply the four steps to
retirement planning to Jacob’s case and
evaluate whether his retirement plans are
achievable. If not then, how to rectify the
situation?
Jacob - 33 years old and is the sole breadwinner of the family of four. He
has two children, a one-year-old and three-year-old and is just starting
to plan for both his retirement and his wife’s retirement.
Current Situation
• Current household income: RM10,000 monthly / RM120,000 annually
• Current Retirement Saving: RM150,000
• Current investment type and return: Regular saving / investments amounting
to RM1,000 monthly with an average return of 10 percent per annum
• Expected Increase in household Income annually: 4 percent
• Expected rate of Inflation annually: 3 percent
Retirement Plans
• Goal: To retire at the age of 55 (22 years to retirement)
• Estimated life expectancy after retirement: 22 years
• Desired lifestyle during retirement: Not have to work and to go for overseas
holidays yearly
• Estimated annual cost of living post-retirement: 90 percent of current expenses
equivalent to RM9,000 monthly/ RM108,000 annually
• Financial and economic challenges: Inflation and family commitments
TOTAL INVESTMENT VALUE at 55 Years Old: RM2,175,305.72
Retirement Fund (RM)
2,500,000
2,000,000
1,500,000
1,000,000
500,000
Balance
Retirement Fund
• Do a simple exercise of summarising
all your income sources, investments,
insurance coverage and deduct your
0
34
39 44 49 54 55 60 65 70 75
Age
12 The 4E Journal

Results
Recommendations and Conclusion
• Jacob needs to save more because
his retirement funds will only last
14 years post retirement or till he
reaches 69 years-old as illustrated
in the graph above.
• Within these 14 years, Jacob can
enjoy more of less 90 percent of
his current lifestyle but will be left
with nothing for the remaining 8
years till the age of 77-years old.
• The bottomline here is that for Jacob
to achieve his retirement goals, he has
to generate additional income sources
either through higher investment
returns or additional income streams
such as side business.
• We recommend an investment
vehicle which is able to yield a higher
return than current i.e. 10 percent.
• It will also help if Jacob reconsiders
his current lifestyle and expenses
to channel more money into
investments.
• Jacob can also consider investing in
more aggressive growth unit trust
funds which are targeted to yield
approximately 10 to 12 percent
returns per annum. This can be
achieved through a small capital
outlay with consistent regular savings.
“Through proper
planning you will be
able to determine how
much you actually
need and whether
your current wealth
accumulation method
is effective.”
From Jacob’s case, we can see that proper
planning is essential. The more time you
have the better but the trick is to put the
plan into action immediately. Having
the buffer also allows you to cover the
unforeseen circumstances and make the
necessary lifestyle changes in time for you
to still achieve your retirement goals.
The earlier you start, the earlier you can
identify the areas which need more
attention and work. So, start taking action
NOW!
Disclaimer:
This has been prepared by HwangDBS Investment
Management Bhd (429786-T) for information only
and is not, and should not be construed as an offer
document or an offer or solicitation to buy or sell
any investments. No representation or warranty,
expressed or implied, is made that such information
or opinions are accurate, complete or verified and
it should not be relied upon as such. Information
and opinions presented are published for the
recipient’s reference only, and are not to be relied
upon as authoritative or without the recipient’s
own independent verification of in substitution for
the exercise of judgment by any recipient, and are
subject to change without notice.

COVER STORY
July - September 2010
The Ageing
Phenomenon
in Malaysia:
Challenges and Opportunities
By Richard Lim
The Ageing Phenomenon
The ageing population in Malaysia, like
many other Asian countries (see following
tables), is increasing rapidly and the rate
of increase is faster than most Western
countries.
Malaysia will be a matured society by
2020 with 9.5 percent of its population
aged 60 and above. If the government
does not start now to actively address
issues arising from its ageing population,
the issues today will become big social
problems in the years to come.
This phenomenon, whilst creating socioeconomic
challenges for the government,
is at the same time creating new business
opportunities in the following areas:
• Demand for innovative financial
planning services for retirees that
help them to create a level of
income that maintain the lifestyles
they are accustomed to during
their retirement years. The planning
services to include counselling that
prepares the clients “mentally ready”
for retirement.
• Demand for suitable housing
alternative that meet the needs of
the elderly who are active and want
to live independently,
• Demand for a viable, cost-efficient
and high standard aged care system
(nursing homes) that caters for the
long-term care needs of frail senior
citizens.
• Demand for mental health and other
allied health services by the elderly,
especially those with depression and
dementia.
The Origin of the Retirement
Concept
When Malaysians say that they are old,
they normally benchmark it against a lifechanging
event. Usually it is the day they
officially retire at the age of 56.
The idea or concept of retirement had
its origin in 1884, when the German
Chancellor implemented a mandatory
retirement age of 65 to remove “living
fossils” from their desks. At that point in
history, the average life expectancy was
only 37.
If Malaysians were to adjust that figure
basing on a life expectancy of 73
(World Health Organisation’s average of
Malaysian life expectancy in 2008) for the
21st Century, the equivalent retirement
age would be around 127 years!
Governments around the world have
since been using retirement as the door to
usher older people out of the work force
to make way for the young. The downward
shift in the statutory retirement aged
happened during the 1970s and 1980s
in the developed countries. We are now
starting to see developed countries
increasing the statutory retirement age as
a means of offsetting the fiscal pressures
of the ageing population.
The idea of a comfortable and enjoyable
retirement years is only a very recent
phenomenon, which came after the Great
Depression.
14 The 4E Journal

In the developed economies, retirement
in the 1940s and the 1950s was a period of
rest after years of toiling in the factories or
in the fields. In the 1970s, retirement was
a reward for the years of hard work, and in
the 1980s it was a period of funded leisure
that came as the result of globalisation
and increasing personal wealth.
Now the emerging retirement trend in the
industrialised world is that retirement is a
period of new opportunity and continued
activity (work, education and leisure)
rather than rest and relaxation.
In a developing economy like Malaysia, a
lot of retirees look at retirement as a period
of rest and relaxation. However, there is
an emergence of a group trend-setting
retirees who are looking forward to an
active old age. These retirees who live
mainly in urban areas and who work in the
services sector or other modern areas of the
economy as well as more exposed to work
practices of developed economies, appear
to be leapfrogging the idea of retirement
as a period of rest and relaxation. They
go straight for the new model of “active
contributory” retirement and they have the
financial means to do so.
The role of the extended Asian/Malaysian
family is also changing. The notion of the
elderly moving in with their children and
expecting their children to care for them
is quickly diminishing. Future generations
of older Asian/ Malaysian people may not
receive the care and financial support
they expect from their families.
Sufficiency of Income and
“Preparedness” for Retirement
In an Employees Provident Fund (EPF)’s
report in May 2007, the average EPF
contributor has approximately RM106,000
in his/her EPF account on retirement and
99.9 percent of them withdrew their
savings in one lump sum. And that lump
sum would be used up within 10 years of
retirement.
Given that the average life expectancy of a
Malaysian is 73, the question is how does
an average Malaysian (EPF contributor)
sustain the remaining eight years of his/
her retirement?
This income sufficiency issue is further
compounded by the fact that an average
Malaysian needs nine years of nursing
care of some form. Where does he or she
get the additional funds to cover those
medical and hospital expenses and the
cost of staying in a reasonable standard
nursing home?
Hong Kong
1,118
Another issue is how well is a retiree
prepared “mentally” for retirement?
Retirees have become accustomed to
work and everything associated with it.
Once the novelty of retirement is over,
reality sets in with feelings of loss of
3,577
Japan
34,751 46,748
27
42
Indonesia
19,049 Over 60 Years (’000) 67,355 As % 8of Total Population 24
Country
Malaysia
2006 1,847
2050 8,405
2006 7
2050 2
Singapore China
Hong Thailand Kong
Australia Japan
147,799 561
6,945 1,118
34,751 3,602
431,532 1,983
20,702 3,577
46,748 8,356
11 13
16 11
27 18
31 38
39 28
42 30
Source: Indonesia
United Nations World Population 19,049 Over Data 60 Years (’000) 67,355 As % 8of Total Population 24
Country
Malaysia
2006 1,847
2050 8,405
2006 7
2050 2
Singapore China
Hong Thailand Kong
Australia Japan
147,799 561
6,945 1,118
34,751 3,602
431,532 1,983
20,702 3,577
46,748 8,356
11 13
16 11
27 18
31 38
39 28
42 30
Source: Indonesia
United Nations World Population 19,049 Data 67,355
8
24
Malaysia
1,847
8,405
7
2
Singapore
Thailand Country
561Population 1,983
aged 65+
6,945 increasing from 20,702 7% to 14%
13
11
38
No. of Years 28
Australia France 3,602 1865 - 1980 8,356
18 115 30
Source: United Sweden Nations World Population Data 1890 - 1975 85
Australia 1938 - 2011 73
U.S.
Country Canada
Population 1944 - 2013 aged 65+
increasing 1944 from - 2009 7% to 14%
69
No. of 65Years
France Britain 1930 1865 - 1975 1980 115 45
Sweden Spain 1947 1890 - 1992 1975 45 85
Australia Japan 1970 1938 - 1996 2011 26 73
China U.S. Population 2000 1944 - 2026 2013 aged 65+
26 69
Sri Country Canada Lanka increasing 1944 2002 from --2026 2009 7% to 14%
No. of 24 65Years
Thailand France Britain 2002 1930 1865 - 2024 1975 1980 115 22 45
Singapore Sweden Spain 2000 1947 1890 - 2019 1992 1975 19 45 85
Malaysia* Australia Japan 2019 1970 1938 -- 2050* 1996 2011 31* 26 73
China U.S. 2000 1944 - 2026 2013 26 69
(* estimate by the author based on U.S. Census Bureau “An Aging World 2001 publication)
Sri Canada Lanka 1944 2002 --2026 2009 24
Source: Kinsella & Gist 1995 and U.S. Census Bureau, International Data Base 2008
65
Thailand Britain 2002 1930 - 2024 1975 22 45
Singapore Spain 2000 1947 - 2019 1992 19 45
Malaysia* Japan 2019 1970 - 2050* 1996 31* 26
China 2000 - 2026 26
(* estimate by the author based on U.S. Census Bureau “An Aging World 2001 publication)
Source: Kinsella Sri Lanka & Gist 1995 and U.S. Census Bureau, 2002 International -2026 Data Base 2008
24
Thailand 2002 - 2024 22
Singapore 2000 - 2019 19
Percentage Increase in Population
Malaysia* aged 65 & over 2008 2019 to 2040 - 2050* Developing Countries 31*
(* estimate Singapore
by the author based on U.S. Census 316 Bureau “An Aging World France 2001 publication) 69
Source: Kinsella & Gist 1995 and U.S. Census Bureau, International Data Base 2008
Malaysia
269
Japan
30
Indonesia
223
Australia
105
Thailand
China
Percentage 179 Increase in Population Canada
aged 65 & over 209 2008 to 2040 Developing U.S. Countries
114
107
Singapore Sri Lanka
South Malaysia Korea
316 182
269 216
Sweden France
Denmark Japan
69 43
30 65
Source: U.S. Indonesia Census Bureau “An Aging World 2232008”
Australia
105
Thailand
China
Percentage 179 Increase in Population Canada
aged 65 & over 209 2008 to 2040 Developing U.S. Countries
114
107
Given the
Singapore Sri above Lanka scenario, it is imperative
316 182 purpose, Sweden France
sense of belonging,
69 43fulfilment
for Malaysians to start planning early for and usefulness.
South Malaysia Korea
269 216
Denmark Japan
30 65
their retirement. It is more so for retirees
to Source: implement U.S. Indonesia Census innovative Bureau “An Aging financial World 2232008”
plans In developed Australia countries like 105 U.S., Britain,
so that Thailand their cumulative savings 179 are
sufficient China to sustain the lifestyles 209 they
Switzerland, CanadaAustralia, Japan 114 and even
Singapore, U.S. there is a surge in 107 depression
wish to maintain Sri Lankaafter retirement, 182 without and the Sweden suicide rates in males and 43to a lesser
the need to ask for financial help from the degree in females in the post-retirement
South Korea
216
Denmark
65
children.
age group. Suicide rates generally increase
Source: U.S. Census Bureau “An Aging World 2008” with age among men and are highest at
aged 75 and over. For women, it also tends
to rise with age but peak before age 75.
16
39
Also, the phenomenon of a man dying
within years of retirement is not a myth. It
happens all too often.
The 4E Journal 15

Traditional Family Practice of
Filial Piety Evolving
Traditionally, the elderly in Asia expect
their children to look after them during
old age and more often than not stay with
their children.
The children, whilst realising the many
practical issues and challenges of keeping
their parents in their homes, are reluctant
to accept the concept of retirement living
as a better living alternative for their
parents.
This reluctance is due to the perception
of their filial duty to their ageing parents.
Allowing them to live in retirement
villages is often seen as a neglect of their
filial duty and hence a loss of face.
However, this traditional practice is fast
evolving with changing global conditions
as revealed by one inter-generational
study undertaken in Asia recently. This
study revealed that children are starting
to appreciate and accept living in
retirement villages/nursing homes as a
socially acceptable alternative for their
parents. They are starting to appreciate
and embrace the reality that by allowing
and encouraging their parents to live in
retirement villages/nursing homes is in fact
an act of filial piety without any loss of face.
The various research undertaken over
the last few years suggest that more and
more elderly Malaysians prefer to live
independently. Retirement villages could
provide the alternative lifestyle choice
they are looking for.
What is a Retirement Village?
The idea of the retirement village has
developed from the need to provide an
alternative lifestyle choice for members
of the community who have reached
retirement age. The aim is to create a
secure environment where people can
socialise and mix with those of their own
age, thus helping to remove some of the
loneliness and boredom often associated
with growing old.
The trend in retirement village development
in Australia and other developed economies
Residential Aged Care Facility
is towards a resort lifestyle model that offers
a range of lifestyle activities and services to
its residents. Also more and more residents
are looking for developments that have
or have ready access to aged care (nursing
home) facilities.
Such “ageing-in-place” development
offers the residents the opportunity to
age gracefully and with dignity and where
their changing care needs over time can
be met at one familiar location.
Retirement village developments with
on-site aged care facilities are able
Retirement Village
Ageing-In-Place Development
Where the retirement village and
the aged care facility are co-located
in one location – residents
changing care needs over time are
met in one familiar place.
16 The 4E Journal

to offer “a continuum of care” to their
residents and hence are able to attract
higher selling prices for their retirement
units than comparable developments
without on-site aged care facilities. This
price premium is accordingly reflected in
the valuation of the development.
The Myths of Retirement Village
Living
Asians are generally misinformed or
uninformed when it comes to retirement
living. They tend to become emotional
and irrational. Some even feel guilty or not
being filial when the issue of considering
on-site aged care facilities for their
parents is discussed. They also tend to
have misconceptions of what retirement
living really is. Below are some of these
misconceptions:
Myth 1: Retirement village is a place
where old people just sit around waiting
for the inevitable or a place to be “put
away.”
Fact 1: Lifestyle retirement villages
provide a range of activities and
facilities that enable residents to retain
their independence. They also offer
companionship, social, intellectual
and physical activities for the residents.
In reality, it is more likely a vibrant
community of active people enjoying life.
Myth 2: More independence living at
home.
Fact 2: Living at home is in fact more
dependent as it hinges on the help and
good will of others. Retirement villages
offer security and freedom of choice of
activities. Residents can choose to take
part in the village’s activities or be alone.
This is true independence. In time of crisis,
other like-minded residents can offer
immediate support.
Myth 3: Happier being cared for in
extended family household.
Fact 3: A study undertaken in Hong Kong
in 2004 revealed that residents living
in a communal environment (senior
accommodation/retirement village)
showed higher psychological well-being
than residents living alone or with their
families. In Australia, it has been revealed
that once people are exposed to the
concept of retirement village as well as
see and feel the benefits of such housing
and lifestyle option, they will buy into the
idea readily. Retirement village residents
are often heard commenting that they
should have moved into the facility 10
years earlier if they knew of the many
advantages of retirement village living.
Caring for Frail, Elderly
Malaysians
In an ideal world, we all live to a ripe old
age with minimal impairments and just
do not wake up the next morning (i.e. just
die in our sleep). However, this blessed
way of dying only happen to a very small
minority of people.
In Malaysia, a person on average needs
nine years of care when he or she gets
old (i.e. the difference between life
expectancy and healthy life expectancy).
This task of long-term care arising from
chronic diseases and disabilities during
old age has been traditionally provided by
family members.
However, this tradition is increasingly
being challenged by changing values and
a host of other socio-economic factors:
• Some adult children are either
working away from home or have
migrated overseas
• For some elderly, appropriate nursing
and personal care and support just
cannot be provided at home by
family caregivers
• Some adult children can themselves
be old and incapacitated and hence
are unable to provide the care
• Women in the household often work
and can no longer be the traditional
caregivers to elderly parents
This means that the traditional system
of caring is becoming less dominant
as the mode of care provision. The
present healthcare system is primarily
geared towards short-term care and
hospitalisation, which is inadequate and
inappropriate to service the long-term
care needs of elderly with chronic diseases
and disabilities.
As a result, nursing homes can be seen
sprouting all over Malaysia in response to
the demand for external third-party care
services.
“Retirees have become accustomed to work and
everything associated with it. Once the novelty of
retirement is over, reality sets in with feelings of loss of
purpose, sense of belonging, fulfilment and usefulness.”
However, the current nursing care
standard in Malaysia has great
opportunities for further development
and improvement. These nursing
homes generally follow a rudimentary
medical model rather than the more
contemporary social model with a focus
The 4E Journal 17

Normal Living & Life
Physical Care
Spiritual Care
Encouraging
Humour, Joy
Smiles
Supporting
Psychological/
Emotional
Welfare
Home
Valuing &
Respecting
Diversity
Giving
Compassion,
Empathy,
Love
Valuing
Commitment
Family Members
Clients
Asian Communities
INDIVIDUAL
Staff
Maintaining
Dignity
Ensuring
Comforting
& Security
Harmony
with the
Environment
Encouraging
Individuality
Taking Pride
and Satisfaction
in Work
Providing
Time
& Other
Resources
on the residents and their social wellbeing.
Communicating
Respect
& Trust
Visitors
Volunteers
Expressing
Spirituality
Residents
Psychological / Emotional Care
Palliative Care
Advocating for
Those Who
Cannot
Providing
Education
- Internal
& External
Fostering
Relationships
Between
People
Promoting
A Sense of
Belonging
Spatial
Bereavement Care
Quality of Care – consider
individual needs and a host of
complex and inter-related
relationships and the
environment.
Individual - Focus
Rights
Dignity
Quality of Life
Lifestyle
Independence
Social Opportunities
Model of Care
There is evidence now to suggest that
children are more willing to send their
parents to nursing homes if the standard
of care is better and parents are more
willing to go to nursing homes if the place
has a more homely setting.
Caring for Elderly Malaysians
with Dementia
many as half of the people in their 80s
suffer from dementia.
One source has estimated that up to
346,000 Malaysians currently have
dementia or signs of dementia and this
figure is expected to increase significantly
in the future.
Dementia is likely to become the largest
cause of ‘disability burden’ after depression
for the elderly in the years to come.
The financial burden of this disease was
quantified at the Alzheimer’s Disease
International Conference in March 2009
which noted that the societal cost of
this disease in Malaysia amounts to
US$511 million (RM1.65 billion) a year. By
whatever measure, it is a huge burden to
family members and caregivers and to the
country as a whole.
This leads to the next question of how we
care for these elderly with dementia when
family members do not have the capacity
to care for them at home anymore. To
care for these elderly professionally and
compassionately, we need specially
trained nurses and caregivers in a purpose
built facility. There is currently no such
Dementia has been used to describe the
loss of memory, intellect, rationality, social
skills and normal emotional reactions.
The most common symptoms include
confusion, personality change, apathy,
withdrawal and loss of ability to do simple,
everyday tasks.
It is one of the most frightening and
fearful diseases that affect the elderly
and indirectly their immediate family
members.
At a conference held in the U.S. in 2007, it
was noted that people with Alzheimer’s
disease will increase from 26 million
worldwide in 2006 to 106 million in 2050.
The largest increase in this disease will
occur in Asia, where 48 percent of the
world’s Alzheimer cases currently reside.
As for Malaysia, the Malaysian Psychiatric
Association reported that 5 to 8 percent of
all people over the age of 65 have some
form of dementia and estimated that as
“There is evidence now to suggest that children are
more willing to send their parents to nursing homes
if the standard of care is better and parents are more
willing to go to nursing homes if the place has a more
homely setting.”
18 The 4E Journal

Retirement villages offer
security and freedom of
choice of activities. Residents
can choose to take part in the
village’s activities or be alone.
This is true independence.
In time of crisis, other likeminded
residents can offer
immediate support.
purpose built nursing homes or facility
within nursing homes in Malaysia that
provides dementia-specific nursing care.
Is the non-existent of such service due to
the affordability factor or that Malaysians
are not aware of the urgent need of such
external third party care service?
Are Malaysians responding to
the challenges ahead?
Recent research undertaken by two
global financial institutions, research
organisations and individuals on ageing
and retirement in Asia have the following
findings:
• Rapid increase in ageing Asians in
numbers as well as percentages of
total population
• The rate of increase of the elderly in
Asia is faster than most industrialised
countries
• With standards of living and
health improving significantly,
lifestyle expectations increase
correspondingly
• Inter-generational issues arising from
globalisation – conflict between
traditional “filial piety” duties and
modern global lifestyle
• The myth of “three generations
under one roof” – more and more
elderly realise and expect to live
independently but with ready access
to their children/ grandchildren and
friends
• The emergence of “trend-setter”
retirees who take on the new
retirement model and lifestyle readily
• More and more difficult for family
members to provide care services to
their elderly
• More and more family members
are looking for nursing homes with
better standard of care and have the
capacity to pay accordingly
• The incidence of dementia is
expected to increase alarmingly in
the future
Malaysians are responding to those
challenges by starting nursing homes
generally from converted premises and
several attempts (failed) in retirement
village developments in the recent past.
The exception is one such charity-based
retirement village development in Kuala
Lumpur which has been operating rather
successfully for almost 12 years now.
As to the question of whether Malaysians
are ready for purpose built retirement
village that offers resort lifestyle living
with on-site high quality aged care facility,
so that its residents can age gracefully and
with dignity, this writer is of the opinion
that “if we build, they will come.”
For retirement village with aged care
(nursing home) facility development to
be successful as a commercial venture,
the following critical factors must be fully
understood:
• Understanding the ageing process,
psychology of colours and the
physiological and psychological
changes to the abilities, behaviour
and social attitudes of its target
market
• Understanding the lifestyle needs
Typical Ground Level Connecting Nursing Beds
of the target market – the “pull” and
“push” factors that draw Malaysian
retirees to such lifestyle development
• Appreciation that it is a long-term
“lifestyle play” underpin by the
property element
• It is a long-term commitment with a
strong social overtone
• Evolve a business model that is
relevant to the market and equitable
both to the developers and residents
alike
• A nursing care standard that
embraces international best practices
and a model of care that focuses on
the resident social well-being
Richard Lim has over 12 years of experience
in the retirement and aged care industry.
He was one of the founding directors of
Australia’s first Asian specific “Ageing-in-
Place” development based on Asian values
and philosophies (www.jetagardens.com).
He is also a founding director of Skylight
Lifestyles Group with offices in Australia
and Kuala Lumpur. The group specialises
in wellness, retirement and aged care
advisory services and telecare and assistive
technologies sourcing. He can be reached
at: richardlim.47@gmail.com
The 4E Journal 19

COVER STORY
July - September 2010
What I’ve Come to Believe
About Retirement Planning
By Rick Adkins, CFP®, ChFC, CLU
Rick Adkins, CFP®, ChFC, CLU, is president/CEO of The Arkansas Financial Group Inc. in Little Rock, Arkansas. He served as the 2003
chair of the Board of Governors of Certified Financial Planner Board of Standards. You can e-mail Rick at: RickA@ARfinancial.com.
Twenty-five years ago, for most of
us retirement planning was pretty
much a theoretical exercise. Our firm
had few, if any, retired clients. We were
building our firm with folks who were
age 40, plus or minus 15 years. They were
mainly concerned with accumulating
assets. They, and we, were oblivious
regarding how they might actually
convert those assets into an income
stream.
I studied Monte Carlo analysis in graduate
school, but in the early years of my career,
I had no way to implement the technique.
The retirement sufficiency calculations
we used were deterministic, employing
static savings, earnings, spending, and
inflation assumptions. The result was a
neat, smooth chart like Figure 1. It was the
best we could do at the time. But it brings
to my mind the H. L. Mencken quote, “For
every complex problem there is an answer
that is clear, simple, and wrong.”
At my core I’m a mathematics and finance
geek. My 1970s-based MBA programme
focused almost exclusively on quantitative
methods. We thought case studies
were for sissies. My first spreadsheet
programme was VisiCalc. I cut my teeth
Figure 1: Old-Fashion Balanced Retirement Calculation
Account Balance
(Millions of Dollars)
10
9
8
7
6
5
4
3
2
1
0
42 46 50 54 58 62 66 70 74 78 82 86 90 94 98
writing single-sheet spreadsheets and
thought I had died and gone to heaven
when linkable, multi-sheet spreadsheets
came along. They allowed us to build
increasingly customisable spreadsheets
that could incorporate complex client
assumptions. As it turns out, client and
investment market behaviour was rarely
captured in those assumptions.
If you want some humbling entertainment,
look at a few of the retirement calculations
your firm performed 20 years ago. I
Age
generally find that we overstated the
portfolio earnings rate (greatly), the
inflation rate (modestly), and the savings
rate (ridiculously). We underestimated
the increase in the spending level and
the unexpected large withdrawals. We
had absolutely no way to predict divorce
or death of a spouse and we were really
thrown curve balls on job losses. And let’s
face it; in 1999 no one predicted that the
major U.S. equity indices would enjoy a
decade of negative returns. That’ll leave
a mark!
20 The 4E Journal

Figure 2: Portfolio History from 95 to 10
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
0
-$1,000,000
-$2,000,000
10/1/95
10/1/96
10/1/97
10/1/98
10/1/99
10/1/00
10/1/01
So, here are five of my beliefs about
retirement planning. They may be
debatable; they’re just some of the things
I’ve come to believe. Embedded in these
beliefs are the three dimensions in which
I’m convinced we must serve our clients, if
we are to help them to be successful:
In the real world, there’s no
such thing as a straight line or a
smooth curve.
Compare the chart in Figure 2 with
the chart in Figure 1. Notice anything
different? There are no straight lines or
smooth curves. This chart reflects the first
of the three dimensions of retirement
planning, the portfolio dimension.
There are some advisers who confuse
this dimension with actual retirement
planning. It is naively assumed that if
the investing is well done, retirement
will work out just fine. This chart shows
the effect of the two variables that drive
results: (1) portfolio performance and (2)
client behaviour. What it does not do is
demonstrate how well the client can meet
their retirement expectations. You can do
everything right investing your client’s
funds, but if their saving or spending
behaviours aren’t cooperative, they can
still fail to meet their goals. Firms that
stop at this dimension are doomed to lose
assets and market share as their clients
come to realise that their adviser can’t
definitively answer the simple question,
“How soon can I afford to retire?”
There’s no such thing as a safe
investment.
10/1/02
10/1/03
10/1/04
10/1/05
10/1/06
10/1/07
10/1/08
10/1/09
Contributions Div/Int/Cap Gains Div/Int/Cap Gains
Withdrawals
Growth
now know that’s not so. For years, many
believed that investment-grade corporate
bonds were safe, until we watched AArated
bonds default.
The biggest trap caused by the bull market
of the 1990s was that many of us focused
on return, with little regard for risk. If the
retirement numbers didn’t work, just
bump up the return assumptions with no
consideration on the increased risk level!
Even today, risk lurks in unlikely places.
Ten-year Treasuries currently yield around
4 percent. I just heard a noted economist
suggest that the 10-year Treasury could
be at 10 percent by mid-2013. You do the
math to see how much principal decline
would result from such an outcome.
Retirement planning demands obsessive
scrutiny of risk. If we fail at this point, we
can ruin lives.
Figure 3: The Effect of Market Performance
on Achieving the Client’s Goal
Accumulated Assets
$4.8m
$4.1m
$3.4m
$2.7m
$2m
$1.4m
$681.8k
Retirement
Clients must be better educated about
the known and possible risks they face in
their retirement portfolios. Figure 3 takes
retirement planning to the risk dimension
— the second level. Here, we haven’t just
shown the client when they’re likely
to run out of money if average returns
are achieved, we also show them how
this could change if we went through
persistently poor markets. After the last
decade, I would feel remiss if I didn’t
share this with the client. This gives both
of us time to take actions that offer the
best chance to improve the outcome.
Performance alone won’t achieve
retirement success.
Human beings have little
capacity to predict their
spending patterns five years
from now, let alone 40 years
from now.
When I think back on financial forecasting
techniques I studied and then taught,
the accuracy of a forecast was assumed
to decrease as the time period increased.
We have a great capacity to think about
our “daily bread.” We have little capacity
to predict what we’ll spend on food in
10 years, let alone our cable TV, Internet,
and cell phone expenditures. If you don’t
believe me, look at your spending in
these areas (if they even existed) just 10
years ago. I can’t wait to see what I’ll be
paying for “transporter beam” services
in 15 years! It isn’t just a matter of simply
inflating today’s expenses; we must also
attempt to project where our clients will
be spending their money 30 years from
now. More practically, how accurate are
today’s spending assumptions that you’re
Shortfall
Back in the old days, we believed that
small-cap stocks were risky, but largecap
stocks, particularly those in the Dow,
were safe. I even had clients who would
recite the old saying, “As goes GM (… GE
or Merrill Lynch), so goes the country.” We
$0
56 64 72 80 88 96 104
if the market
performs poorly
Age
if the market
performs on average
Your total goal
The 4E Journal 21

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using? I don’t know about you but most
of the budgets we get from clients should
be classified as fiction, not biography. This
is an area that at one time we blew off, but
now pay much greater attention to, no
matter how messy it gets.
Human beings aren’t wired to
conceptualise large sums of
capital.
The studies showing the incredible
number of lottery winners who file for
bankruptcy in a short time have great
significance on retirement planning. How
many of your clients hold the vast majority
of their assets in qualified plans? (In fact,
do you have any clients about whom
you could change “the vast majority”
to “all”?) That probably has more to do
with the difficulty in getting to qualified
monies compared to non-qualified
accounts. Excepting those born into great
family wealth, most of us are culturally
programmed to think week-to-week or
month-to-month in our spending. If we
receive a large sum of money (or start
receiving a very large income that could
stop at any time, as is the case with athletes
or entertainers) we can mentally confuse
the large sum with a massive monthly
amount that will continue forever. Getting
clients to see their portfolio as a large fruit
tree where they harvest fruit (dividends
and interest) rather than lopping off
limbs (withdrawing principle) is critical
to helping them remain successful. This
allows us to use our month-to-month bias
in a positive manner.
The answer doesn’t (and will
never) rely on one simple
solution or product.
Figure 4: Flow of Cash Between Accounts
for Sample Retired Couple
His IRA Account
$650
Before Tax
His Social
Security
$1,715
per Month
$5,200
Joint
Checking
$657 Actual
Cash Flow
$520 net
After Tax on 25th
$3,482
on 28th
$1,788,78
on 25th
His Trust Account
$763 Actual
Cash Flow
Joint Investment
Account
Over the years I’ve read with amusement
articles suggesting that an insurance or
investment product manufacturer has or
will come out with a “silver bullet” product
that will solve all problems associated
with retirement income distributions (it
brings back to mind the Mencken quote).
There is one word that explains why this is
unlikely to happen — complexity.
Figure 4 shows the actual flow of cash
between accounts for one of our retired
clients. This chart demonstrates the third
dimension we face in retirement planning
— the cash flow dimension. If we fail here,
our clients don’t eat! So, why might a
one-product-fits-all approach struggle in
the real world? First, the potential benefit
from a single product would be greatest if
the client had everything in one account.
I can only think of two of our clients who
fall into that category. Planners using
all available tools usually have multiple
accounts for each household. In our case,
the average is five.
Second, the source of distributions
may need to change for tax reasons;
particularly before 50½ and after 70½.
Flexibility of distributions is the only way
to cover needed changes as they arise.
Third, I have great concern over how tax
laws will change over the next decade.
The last thing I would want is to have
all distributions taxed at ordinary rates
if there are less onerous options (as we
have today). The flexibility to affect the
character of taxable income may grow,
not decline, in importance as Congress
continues to wrestle with ways to reduce
Their CRUT Account
Non-Routine Expenses
$2,941.22
on 25th
$582 Actual
Cash Flow
$1,000
on 25th
$2,768
on 28th
$1,347 Actual
Cash Flow
Her Trust Account
$299 Actual
Cash Flow
Save to Spend
$10,000 Seed Money
the deficit that has developed over the
past nine years.
Implementing all three dimensions in
today’s technological environment is
still a challenge. Our systems do the first
dimension well, the second dimension
okay, and the third dimension poorly. This
third area is where I’m hopeful more effort
is made by technology providers and
intermediaries. Systems to monitor and
manage this third dimension are virtually
non-existent. That wasn’t a problem when
we only had two retired clients, but it’s a
problem now, and I hate to think what it
will look like in 10 years.
Our Primary Role: The Ghost of
Christmas Future
Even if we master all three of the
dimensions I’ve outlined, the remaining
wild card is client behaviour. I’ve come to
believe that we can’t actually change client
behaviour; we can only show them the
results of their current course of action in a
clear, accurate manner. If they don’t like the
outcome, they’ll affect the change. There
is a powerful quote in therapist circles that
goes something like this, “Change happens
when the pain of staying the same is
greater than the pain of the change.”
Ebenezer Scrooge’s life was transformed
after the Ghost of Christmas Future ran the
video forward, showing the consequences
of continuing his current approach to life.
The pain of changing from a greedy old
Scrooge was nothing compared to a life of
derision and abandonment.
The sooner clients see retirement issues in
great clarity through all three dimensions,
the sooner they can affect the change
needed to make the picture turn out the
way they desire. Retirement math is brutal;
simply trying to deal with it by wishing,
hoping, and living in denial is a formula for
disaster. We have the ability to enable clients
to make needed changes before it’s too late.
Most of our physician clients have to
deliver news that their patients don’t
particularly want to hear, but they deliver
it kindly, yet frankly. By doing so, they
permit their patients to choose the course
of care, knowing both the risks and the
potential benefits that they prefer. Over
the next few years, we’ll be faced with
similar challenges with many of our
clients. It may not be pretty, but we will be
serving best when we accurately depict a
future that can still be changed.
Reprinted with permission from the July
2010 issue of the Journal of Financial
Planning.
The 4E Journal 23

COVER STORY
July - September 2010
The Psychology
of Retirement Planning
By Gregory Salsbury
While there has been a recent
awakening to the psychological
dimensions of money and
investing — often referred to as
behavioural finance or behavioural
economics — there has been precious
little work that connects these dimensions
specifically to retirement planning. Now, in
the wake of the worst financial downturn
since the Great Depression, millions of
baby boomers are on the threshold of
their golden years and are deeply in need
of revisiting their notion of retirement. As
a result, financial planners are increasingly
called upon to act as counselors — or
even part-time psychologists.
Retirement is not a “zone” or isolated event
— it is a continuum that is connected to
the breadth of an individual’s financial
and personal decisions. As such, providing
truly holistic advice requires developing
an understanding of why clients are
making certain choices and exhibiting
various behaviours. By learning to
recognise the psychological factors that
can lead to dangerous financial habits,
advisers can help their clients begin to
change those behaviours.
My new book Retirementology examines
many of the common mistakes people
make when it comes to spending, saving,
and investing. In the following article, I will
discuss what I consider to be three of the
most harmful of these problems — the
house money effect, number numbness,
and layering — each of which has grown
more pervasive in the aftermath of the
worst financial crisis of our lifetimes. My
descriptions of these biases will provide
a high-level overview of the behavioural
finance concepts from which they
originate, as well as potential implications
for your clients, followed by actionable
strategies you can employ to address the
issues at hand.
“Many people counted on the appreciation of their
homes to fund retirement, a dangerous condition I refer
to as ‘equimortis.’”
The House Money Effect
It is often said that “perception clouds
reality,” and the behaviour of countless
homeowners during the housing boom
has added a great deal of credence to this
axiom. Encouraged by rapidly rising home
values, millions of homeowners fell victim
to the “wealth effect,” which caused them to
develop an inflated perception of their net
worth. The wealth effect gives rise to what
I call the “house money effect,” a concept
based on the mindset of gamblers who
experience big wins and are consequently
willing to take more risks because they are
playing with “house money.”
During the housing boom, Americans
adopted the mindset of playing with
house money as they used the equity
in their homes to pay for vacations, new
cars, or, in some cases, more houses.
Many people even counted on the
appreciation of their homes to fund
retirement, a dangerous condition I refer
to as “equimortis.” (Note: equimortis is
one of many terms I invented as a kind
of shorthand to help readers relate to
the concepts in the book. Advisers may
find them a useful means of broaching
complex and often sensitive topics with
clients.)
In a shockingly brief period, homes
have gone from being many Americans’
greatest asset to their biggest financial
liability. For millions of Americans — and
perhaps many of your clients — the
result has been not merely a negative
adjustment to their portfolios and psyches,
24 The 4E Journal

etirement, you can ease their anxiety
and cure their finertia by helping them
develop an income strategy. The process,
which involves charting the client’s
retirement expenses and sources of
income, takes the mystery and complexity
out of the “magic number” by breaking it
down into categories to which your clients
can relate. You can use charts that look
just like a standard budgeting worksheet,
with estimated discretionary and
nondiscretionary expenses in one table
and retirement savings and investments
in another.
but a complete reversal. Plummeting
home values have damaged a great deal
more than our pocketbooks — many an
ego has been badly bruised.
Adviser Takeaway. Understanding the
complex and deep-seated emotional
attachments people have to their homes
is the first step in helping repair the
damage for clients who made the mistake
of viewing their homes as retirement
accounts. Getting them to see that a
house is a shelter and not an investment
is the first step. If you can convince
them of that, they will be more open to
considering alternative options.
Some of the solutions are surprisingly
simple, but can have a tangible effect on
a very complex problem. For example,
retirees who don’t have a lot of equity
in their homes might want to consider
renting a smaller house in retirement.
For clients who plan to stay in their
homes, overpaying their mortgages by
US$100 or so a month can save them
tens of thousands of dollars over the life
of the loan and dramatically reduce the
number of years they will be paying off
their homes. 1 This last option is a perfect
example of how a small, seemingly
inconsequential decision can have a
significant effect on the retirement
planning continuum.
Number Numbness
Whether it is the staggering sums
reported in relation to the federal deficit
and national debt, or the elusive “number”
representing an adequate retirement
nest egg, people are easily overwhelmed
— and subsequently numbed — by the
sheer size of numbers that seem too large
to comprehend. Number numbness leads
to what I have dubbed “finertia,” which is
the paralysis that sets in when investors
try to make sense of contradictory and
confusing financial information. Finertia
makes the prospect of planning for
retirement too complex to face, which
may explain why so many people have
opted to simply do nothing.
For most of your clients, the most
numbing number of all is the amount
they need to comfortably retire. Even you,
as an experienced financial professional,
cannot say for certain what that number
should be. A Monte Carlo simulation
can supposedly account for hundreds of
thousands of potential market scenarios,
but no formula is advanced enough to
predict the future — there are simply
too many variables. The task is further
complicated by the human emotions
involved — you must factor in your
clients’ changing needs and desires,
their expectations, and the effects of
unanticipated family situations or market
movements. Macro issues such as inflation,
longevity, healthcare, and taxes add yet
another layer of complexity.
Number numbness is not only relegated
to vast quantities; it can also take the form
of “bigness bias,” which is the tendency to
be indifferent to small numbers such as 1
or 2 percent. Overlooking small numbers
can be a big problem when it comes to
accounting for taxes and inflation in a
long-term financial plan. Consider the
investors who were making big returns
on equity investments during the 18-year
bull market of 1982–2000. At the time,
inflation was barely perceptible at 1 or 2
percent annually, but it was still slowly
eating away at the purchasing power of
every dollar investors earned.
Adviser Takeaway. While you may be
powerless to predict the exact dollar
amount your clients will need for
Retirement planning is never going
to get less complex; in fact, the effects
of the financial meltdown we have
just experienced will likely exacerbate
the issue for many years to come. As
an adviser, it is your job to handle the
complexity based on your knowledge and
experience, while making the process as
simple as possible for your clients. Begin
with this lesson: every large amount
starts as a small amount — the key to
making your money grow is time and
discipline. It may seem overly simplistic,
but for anyone who is intimidated by the
numbers involved in accumulating the
money needed for retirement, this is a
compelling and comforting concept.
Layering—The Proxy Perception
Just as Las Vegas has learned that people
will toss chips around far more liberally
than cash, the credit card industry knows
very well that people treat those little
plastic rectangles differently than actual
money. Credit cards, debit cards, and
electronic bank statements are quick
and convenient, but these automated
forms of payment create a psychological
disconnect that makes money more
opaque to consumers. In behavioural
finance, the concept is known as
“layering” — a term borrowed from moneylaundering
that refers to the layers of
separation from the place where the
money was originally earned. The thicker
the layers, the greater the opportunity for
clients to make poor financial decisions.
The physical proxy of the check or
credit card creates one layer; we are
further removed from our money by the
expediency and opaqueness of the entire
transaction process at most retail outlets.
Signatures are seldom required when we
use credit or debit cards, and quite often,
“Finertia makes the prospect of planning for
retirement too complex to face, which may explain
why so many people have opted to simply do nothing.”
The 4E Journal 25

we are not even offered a receipt for our
purchases.
Marketers understand consumer
psychology and the layering effect just
as well as behavioural finance experts,
and they are continually introducing new
ways to induce customers to give in to
impulse spending. The cruise industry is
a perfect example — it does a marvelous
job of arranging and masking various
combinations of expenditures to make it
nearly impossible to discern how much
any given item or activity actually costs.
Perhaps the most effective concept is
“ship credit” — you pay for it in advance of
the cruise so that you have already parted
with your money before you even leave
the shore. It is possible to get unspent
funds back at the end of the cruise, but
the process is often so complicated that
it becomes easier to simply spend the
credit you originally purchased. From
a psychological standpoint, you have
already re-categorised the money as
something other than your own.
Adviser Takeaway. While it may not have
been part of the conversations you have
had with clients in the past, it is important
that you begin helping your clients
understand the potential implications of
their spending habits. What your clients
spend today may affect their retirement
later (remember, retirement is a process,
not an isolated event), but the layering
effect can make this a difficult concept
to grasp.
Using scenarios your clients can relate
to will help put things in the proper
perspective. For example, a young couple
trying to save for retirement faces the
following choice: they can buy a new
car for US$30,000, or a pre-owned car
with low mileage for US$23,000 and
put US$7,000 into a retirement vehicle.
Compound that US$7,000 at whatever
the assumed rate of accumulation is for
the next 30 years, and a seemingly minor
purchase decision can have a significant
effect on their retirement.
Another powerful tactic for demonstrating
the layering phenomenon is the “cash
challenge.” Have your clients put away all
credit cards, debit cards, and checkbooks
and try exclusively using cash for one week.
If they are amenable to the idea, they will
likely be astonished when they realise
how much money they spend when they
are not distanced from their funds by
layered forms of payment. Your clients will
probably return to their credit and debit
cards for the sake of convenience, but you
can use the exercise as a starting point to
help your clients organise their purchases
more prudently. For example, use cash for
“The cruise industry does a marvelous job of arranging
and masking various combinations of expenditures
to make it nearly impossible to discern how much any
given item or activity actually costs.”
discretionary expenses, such as restaurant
meals, clothes, and gourmet coffee; use
credit for non-discretionary expenses,
such as gasoline, groceries, and car repairs.
Lastly, while all of the automation in the
retail environment has led to a great
deal of overspending among consumers,
automation can be a positive — and
powerful — tool when used properly. Just
as automation can create a mental buffer
against how much we are spending, it can
also divert our attention away from how
much we are saving. Making automatic
contributions to a retirement account is
one of the easiest and most effective ways
to build a nest egg, and it is a strategy you
should encourage all of your clients to
employ.
Final Takeaway
The mindsets and biases described above
are highly complex — in fact, we have only
scratched the surface of the various origins,
attributes, and potential consequences of
these behaviours. The good news is you
need not possess an in-depth knowledge
of investor psychology to understand
how your clients think about money. The
most important thing is to be cognisant of
the emotions that play into their financial
decisions and use these considerations to
guide the financial planning process. After
all, even the best advice is meaningless if
your clients won’t follow it, so it is critical
that you develop solutions that address
both the emotional and fiscal aspects of
retirement.
It is important to note that many of the
explanations and recommendations
presented in Retirementology are
intentionally simplified. I did not set out
to create a highly technical dissertation
on behavioural finance, but rather a clear,
honest account of the psychological
pitfalls so many people stumble over on
the road to retirement. At the same time,
retirement is hardly a simple subject, as
you and your clients know. But while the
issue is complex, your conversations with
clients are most effective when simple
and straightforward. By using terms and
concepts they can relate to, such as house
money, finertia, and equimortis, you
can help alleviate some of the fear and
uncertainty they are experiencing.
Finally, the concepts I chose to include in
this piece are three of the most pervasive
and problematic, but they are by no
means the only psychological factors that
can affect your clients’ retirement plans.
All of the attitudes your clients have about
money, and all of the decisions they make
in terms of what to buy and how to live,
will affect their overall financial situation
and their eventual retirement. Taking all
of these factors into account —in other
words, taking a truly holistic approach
to financial planning — is essential
to helping your clients achieve their
retirement goals.
Endnote:
1
Wise Bread, “DIY Mortgage Acceleration,”
May 2007.
Gregory Salsbury, Ph.D., is executive vicepresident
of Jackson National Life Distributors
LLC (JNLD) and author of Retirementology
— Rethinking the American Dream in a
New Economy. For more information, visit
www.retirementology.org. Reprinted with
permission from the July 2010 issue of the
Journal of Financial Planning.
The 4E Journal 27

Everyone Can
Retire Well
Programme for Day 1 - Wednesday, October 13, 2010
9:00AM
Registration
9:30AM
Welcome Remarks
Tan Beng Wah
Co-Organising Chairman
Deputy President
Financial Planning Association of Malaysia
9:35AM
Opening Address
Wong Boon Choy
President
Financial Planning Association of Malaysia
9:40AM
Keynote Address & Official Launch
The Prime Minister of Malaysia (to be confirmed)
10:00AM
Coffee Break
10:30AM
Session 1
Retirement in Malaysia: Policies, Challenges and Proposed
Initiatives
• What are the current policies in Malaysia relating to retirement and what
agencies are involved?
• What are the initiatives that EPF and the government have undertaken in
line with these policies?
• What are some of the issues that the country and its people face
(for example, the lack of awareness on the importance of retirement
planning)?
• What is the status in the introduction of private pensions in Malaysia?
What are the reasons for its introduction, when will it be introduced and
what are the implications for the industry and the consumer.
• As Malaysia moves to implement policies to develop a high-income
economy, what needs to be done for and by retirees and would-be retirees?
• Moving the retirement age for all employees to 60 – implementation
horizon and its implications.
Syed Hamadah Othman
Senior Consultant
Mercer Zainal Consulting Sdn Bhd
Malaysia
11:30AM
Session 2
Retirement Villages
A new concept in retirement, retirement villages are designed to meet the
expectations and aspirations of retired people by offering a socially active and
independent lifestyle, coupled with the reassurance of as much or as little care
as they might ever need. The speaker will share his experience on retirement
villages and the key factors to consider in successfully developing such facilities
which are more than just another property development and definitely not a
variation of an old folks’ home.
Andrew Giles
Chief Executive Officer
Australia Retirement Village Association (ARVA)
Melbourne, Australia

12:30PM
Exhibition Booth Visiting,
Networking & Lunch
2:00PM
Session 3
Medical Planning: A Key Component of Retirement Planning
• What are the main health issues that arise in retirement?
• What are the common medical ailments that senior citizens can
progressively expect?
• What are the costs involved in these ailments?
• What are their future costs projected to be?
• Are they difficult to deal with and what preparations do we need to make
to face them?
• What are some of the things we can do to avoid them or minimise the
possibility of contracting them?
Professor Dr Khoo Ee Ming
Senior Consultant, Department of Primary Care Medicine
Faculty of Medicine, University of Malaya
Malaysia
2:45PM
Session 4
Private Banking: Addressing Clients Who are Preparing for
Retirement
• Share with participants the range of financial products and services that
are typically available to seamlessly meet their needs in terms of wealth
accumulation, protection and distribution.
• Advice on how to undertake cross border transactions which allows access
to more sophisticated products appropriate to one’s needs as well as to
provide an element of diversification to one’s portfolio.
• Understanding, selecting and working effectively with private bankers.
Speaker: To be confirmed
3:30PM
Tea Break
4:00PM
Session 5
Panel Discussion (with Q&A from the floor)
“Is There a Need for National Health Insurance for Retirees?”
• What are the supporting reasons for introducing this scheme and how will
it benefit retirees?
• How will the public be affected by this scheme?
• What do the various related organisations need to undertake to be
prepared for its introduction?
Moderator:
K. Sasitharan
Senior Client Director
ReMark
Malaysia
Panelists:
• Teh Loo Hai
Life Insurance Association of Malaysia
• YB Tony Pua
Member of Parliament, Petaling Jaya Utara
• Dr Rozita Halina Hussein
Deputy Director
Unit for National Health Financing, Planning and
Development Division
Ministry of Health
Malaysia
5:30PM
End of Day 1

Programme for Day 2 - Thursday, October 14, 2010
9:00AM
Session 1
Malaysia & Retirement
• What is the general understanding of Malaysians on retirement?
• What is the Malaysian retirement experience?
• Do Malaysians actually understand the concept of retirement planning?
• Survey findings by insurers.
K. Sasitharan
Senior Client Director
ReMark
Malaysia
9:45AM
Session 2
Managing the Retirement Planning Market:
A Practioner’s Guide
• How to develop a practice that has retirement planning as part of the
portfolio and develop the market for would-be retirees as well as retirees.
• What are the issues faced by the practitioner in this market?
• What are common issues faced by would-be retirees and retirees
(financial, mental, physical, social, etc.)?
• Case studies of successful retirement planning relationships.
• Tools available to the practitioner to operate a successful retirement
planning practice.
Anthony Boon Boo Heng
Partner
IPP Financial Advisers Pte Ltd
Singapore
10:30AM
Coffee Break
11:00AM
Session 3
Tax Considerations in Retirement Planning
An acknowledged leading tax expert in Malaysia, Khoo will share and discuss
the intricate tax considerations in relation to retirement planning. In addition,
he will also discuss how policy-makers and corporate leaders can help to
create a more conducive tax environment for retirees.
Khoo Chuan Keat
Senior Executive Director
PricewaterhouseCoopers
Malaysia
11:45AM
Session 4
Pension Systems in Asia
A study of the pension systems found in the Asian region, the strengths and
drawbacks of each system and what Malaysia needs to consider as it looks
towards strengthening its existing model.
Rex Auyeung
President – Asia
Senior Vice-President, Principal Financial Group
Hong Kong
12:30PM
Exhibition Booth Visiting,
Networking & Lunch

2:00PM
Session 5
Clinical Hypnosis
- The “Well-Being Factor” in Retiring Well
• Introduction to Clinical Hypnosis & Well Being
• Malaysian and British experiences in clinical hypnosis in geriatric health
• As Malaysia heads toward 2020 and an aging society, the benefits of
clinical hypnosis in lifestyle medicine and how clinical hypnosis can
help the greying nation maintain physical and mental well-being after
retirement?
• The importance of well-being
• Clinical hypnosis and healthy aging - physical and mental well-being, health,
forgetfulness, healthy mind-body connection, coping with age related
illnesses, for example, arthritis, menopause, andropause, insomnia, creating
health locus of control and self confidence, dealing with bereavement, loss
Sheila Menon, FBSCH FBAMH
and loneliness depression and fear, etc.
Principal
London College of Clinical Hypnosis (Asia-Australia)
Malaysia
2:45PM
Session 6
The Importance of Cognitive
and Physiological Care in Retirement
As an individual goes through the life cycle of reaching middle age, approaching
retirement and finally finding himself retired - he can expect changes in his
mental and physical self. The change in his work, family and social environment
will have an impact on his mental well-being. In addition to these cognitive
and physiological changes that take place with ageing, there are medical
conditions that occur more commonly. As we all live longer lives, the chances
of developing dementia increases. Dr Petrovich will talk about these aspects
and what the individual, society and the government can do to prepare or care
for those affected so that the retirement years are indeed one’s golden years.
Dr Tanya Petrovich
Coordinator of Vocational Education
& Quality Assurance
Alzheimer’s Australia
Australia
3:30PM
Tea Break
4:00PM
Session 7
Panel Discussion (with Q&A from the floor)
How to Retire Well?
Retiring well has at least six dimensions to it and our panel of experts that are
drawn from all these areas will talk about their areas of expertise providing the
audience with a comprehensive and appropriate summary of the conference.
Moderator: Tan Beng Wah
Chief Executive Officer
CIMB Wealth Advisors Bhd
Panelists:
• Professor Dr Low Wah Yun, PhD
Professor of Psychology
Faculty of Medicine University of Malaya
• Badlisyah Abdul Ghani
Executive Director / Chief Executive Officer
CIMB Islamic Bank
• Rajen Devadason
Chief Executive Officer
RD WealthCreation Sdn Bhd
• Associate Professor Tengku Aizan Hamid, PhD
Institute of Gerontology
Universiti Putra Malaysia
5:30PM
Closing Remarks
Badlisyah Abdul Ghani
Co-Organising Chairman
5:35PM
End of Conference

Everyone Can
Retire Well
Free Public Talks
Pyramid 1, Level CP3
Sunway Pyramid Convention Centre
Day 1 - Wednesday, October 13, 2010 Day 2 - Thursday, October 14, 2010
11:00AM -11:45AM
Where to Buy Properties Now
10:30AM – 11:30AM
Investing on Solid Ground
11:45AM – 12:30PM
Ho Chin Soon
Chief Researcher
Ho Chin Soon Research Sdn Bhd
How to Prepare and Manage Your
Retirement
Professor Dr Low Wah Yun
Professor of Psychology, Faculty of Medicine
University of Malaya
11:30AM – 12:30PM
Walton International Group
Insurance Protection
for Old Age
K. Sasitharan
Senior Client Director
ReMark
Malaysia
12:30PM – 1:00PM
Excellence Award Ceremony
Financial Planning Association of Malaysia
12:30PM – 1:30PM
Managing Your Credit Cards
Credit Counselling and Debt Management
Agency (AKPK)
1:00PM – 2:00PM
Demystifying Negative
Perceptions on Investment in
Stockbroking
Mohamed Ariff Ismail
Associate Director, Strategic Initiatives,
Equities
Maybank Investment Bank
1:30PM – 2:30PM
2:30PM – 3:30PM
Investment, Insurance & You
Radzuan Abu Hadzim
Retail Insurance Manager
Etiqa Takaful
How to Make Your Nest Egg Last
2:00PM – 3:00PM
Regional Trading
Goh Ping Ping
Head of Platinum Broking
Maybank Investment Bank
Retirement Villages
Andrew Giles
Chief Executive Officer
Australia Retirement Village Association
Australia
3:30PM – 4:30PM
Moi Pak Kheong
Licensed Financial Planner
CIMB Wealth Advisors
Location, Timing and Branding in
Real Estate
Ho Chin Soon
Chief Researcher
Ho Chin Soon Research Sdn Bhd
3:00PM – 4:00PM
Why Everyone Needs a Will
Azhar Iskandar Hew
General Manager
Rockwills Trustee Bhd
Malaysia
4:00PM – 5:00PM
Cognitive & Physiological
Care in Retirement
Dr Tanya Petrovich
Coordinator of Vocational Education
Alzheimer’s Australia
Australia

CHAPTER ACTIVITIES
July - September 2010
Constantly Educating the Public
The Malacca Chapter of the Financial
Planning Association of Malaysia
(FPAM) held a talk at the premises
of the Malacca Chinese Chamber of
Commerce and Industry (MCCCI) on
Saturday, August 14, 2010.
Approximately 100 people attended the
talk, which ended with a sumptuous
lunch sponsored by Great Vision Advisory
Group and Phillip Capital Management
Sdn Bhd, a licensed fund management
company.
Malacca Chapter head Tan Kim Book gave
an introduction of FPAM to the attendees
and Great Vision gave a presentation
on estate planning while Phillip Capital
Management provided a stock market
outlook.
Upcoming Chapter Events
CE Course: Global Issues Influencing the capital Market
Speakers:
Date:
Time:
Venue:
Anthony Dass
October 2, 2010 / Saturday
9:00AM - 5:00PM
Harbour View Hotel
Kuching, Sarawak
10 CE
points
10 CPE
points
CE Course: Global Issues Influencing the capital Market
Speakers:
Date:
Time:
Venue:
Anthony Dass
October 11, 2010 / Saturday
9:00AM - 5:00PM
Beverly Hotel
Kota Kinabalu, Sabah
10 CE
points
10 CPE
points
CE Course: The Investment Plan Is your Blueprint for Success – And How You Accumulate Wealth and Sleep Well
Speaker:
Date:
Time:
Venue:
Mike Lee
October 16, 2010 / Saturday
9:00AM - 5:00PM
Tower Regency Hotel
Ipoh, Perak
10 CE
points
10 CPE
points
CE Course: Advising on the Sweet Spot of High Networth Individuals
Speaker:
Date:
Time:
Venue:
Kimmis Pun
November 20, 2010 / Sunday
7:00PM
Evergreen Laurel Hotel
Penang
10 CE
points
FPAM Kuching Chapter Networking Nite
Date:
Time:
Venue:
December 19, 2010 / Sunday
7:00PM
Harbour View Hotel
Kuching, Sarawak
The 4E Journal 37

NEWS IN BRIEF
April - June 2010
PINDOSF: For Investors
with Aggressive Risk Appetite
Public Bank’s wholly-owned subsidiary,
Public Mutual Bhd launched a new fund
– Public Indonesia Select Fund (PINDOSF) –
on September 1, 2010. The fund invests in
a diversified portfolio of blue chips, index
stocks and growth stocks primarily in the
Indonesian market, with up to 30 percent
of its net asset value (NAV) invested in the
Malaysian and other global markets.
Public Mutual’s chief executive officer
Yeoh Kim Hong said Indonesia, which
has the largest economy in Southeast
Asia, is poised to be one of the fastest
growing economies in Asia after China
and India. “Supported by the fourth
largest population in the world and rich
in resources, the Indonesian market
offers good long-term capital growth
opportunities,” she said.
Yeoh added that Indonesia charted a
healthy growth rate averaging 5.1 percent
per annum over the 2000-2009 period as
it was underpinned by resilient domestic
demand and a series of economic reforms.
“Due to its large domestic base, Indonesia’s
economic performance is envisaged to be
more resilient than other economies in the
event of slower global growth,” she said.
Meanwhile, Indonesia’s fiscal position
has improved in recent years due to its
sound fiscal and debt management. Its
government maintained a fiscal deficit
of less than 3 percent of gross domestic
product (GDP) over the 2000-2009 period.
Its GDP growth is expected to rebound
from 4.5 percent in 2009 to 5.8 percent in
2010 and to grow at 6.2 percent in 2011
on the back of resilient consumer and
investment spending as well as strong
global demand for commodities. Its
domestic demand is expected to remain
resilient amidst an accommodative
interest rate environment and
manageable inflationary pressures.
In addition, Indonesia was one of the best
performing regional markets in 2009 with
a 114.7 percent return. The Indonesian
stock market registered a further gain
of 17.5 percent on a year-to-date basis
to July 28, 2010 amidst robust economic
activities.
PINDOSF, Yeoh said, would focus on
sectors which include banking and
finance, commodities, building materials
and consumer. “The banking and finance
sector in Indonesia has experienced strong
growth in loans and financial services,
whereas strong output growth is projected
for its commodities sector. Meanwhile, the
building materials sector benefited from
sustained infrastructure spending, and
improved purchasing power has benefited
the consumer sector,” she pointed out.
PINDOSF’s equity exposure will generally
range from 75 percent to 98 percent of its
NAV. The fund is a niche product suitable for
investors with aggressive risk appetite who
wish to capitalise on the long-term growth
prospects of the Indonesian market.
Yeoh: PINDOSF will focus on sectors which include
banking and finance, commodities, building materials
and consumer.
“Supported by the fourth largest population in the
world and rich in resources, the a market offers good
long-term capital growth opportunities.”
38 The 4E Journal

Empowering
Investors with
i*TradePro@CIMB
CIMB Securities recently launched
i*TradePro@CIMB, an advanced online
equities and futures trading. The new
electronic platform is a fully customisable
desktop trading management system
and is equipped with enhanced technical
charting system with over 40 technical
indicators. It also provides powerful
analysis and comparison studies on
multiple stocks from a single interface.
“CIMB Securities is committed to
empowering investors to make informed
trading decisions. In addition to all our
on-going investor educational initiatives,
we are now providing our clients with
i*TradePro@CIMB, a powerful tool that
allows them to carry out technical
charting analysis,” said Datuk Charon
Wardini Mokhzani, its deputy chief
executive officer, during the product
launch at CIMB Securities’ flagship branch
at Tropicana City.
CIMB Group Integrates
Transaction Banking Regionally
Datuk Charon Wardini Mokhzani (Deputy CEO, Corporate and Investment Banking, CIMB Group) (right)
and Paul Gui (Head of Retail Equities, CIMB Investment Bank) (left) inspecting the i*TradePro@CIMB system
With the i*TradePro@CIMB, customers can
also submit their trading orders and have
instant access to Bursa Malaysia securities
and derivatives’ live prices from anywhere
with an Internet connection. The
i*TradePro@CIMB is a secured application
which can be downloaded via an Internet
link provided by CIMB Securities. For
better mobility, it can also be saved into
a pen-drive to be run on any personal
computer with Microsoft-based operating
system.
cash management. It also contains
enterprise resource planning (ERP)
integration capabilities.
Datuk Seri Nazir Razak, CIMB’s group
chief executive, signed the agreement
while PT Aprisma Indonesia was
represented by its chairman, Iljas Ridwan.
Meanwhile, Susanto Chandra, managing
director of PT Aprisma Indonesia said,
“We are honoured that CIMB Group has
awarded us this regional mandate. Our
technology capabilities and up-to-date
features and modules will support
CIMB Group’s efforts to further grow
its transaction banking business and
promote efficiency.”
Left to Right: Arwin Rasyid (President Director, PT Bank CIMB Niaga), Datuk Seri Nazir Razak (Group Chief Executive,
CIMB Group), Iljas Ridwan (Chairman, PT Aprisma Indonesia) and Susanto Chandra (Managing Director, PT
Aprisma Indonesia) sharing a light moment after the signing in Jakarta today.
CIMB Group recently inked an
agreement with PT Aprisma Indonesia
to form a strategic partnership to roll out
BizChannel across Malaysia, Indonesia,
Singapore and Thailand.
“In view of our strategy to grow our
current and saving accounts and fee
income as well as embed our branding
as a solid transaction bank in ASEAN,
this project introduces a single Internetbased
front-end platform for corporates,
consolidating both trade finance and cash
management products and services,” said
Arwin Rasyid, president director, PT Bank
CIMB Niaga, Tbk.
Speaking at the signing ceremony on behalf
of the Group, Arwin said the technology
provided by Aprisma includes simple
features from letter of credit openings
to complex supply chain modules under
trade finance with new account structure
models and mobile authorisation under
Arwin also said the project is also to unify
CIMB’s transaction banking franchise
across Malaysia, Indonesia, Singapore
and Thailand and to promote ‘forward
banking’ by introducing new BizChannel,
as the regional champion product for
transaction banking.
“This partnership with Aprisma reflects
CIMB Group’s support for local
companies throughout the region. We
are an indigenous ASEAN franchise
and we will continue to provide
opportunities for local companies to
regionalise their businesses alongside
our own,” Arwin added.
The 4E Journal 39

CFP CERTIFICATION
GLOBAL UPDATES
July - September 2010
New Learning and Assessment Tools to
Enhance Professionalism in Financial Planning
Denver: Financial Planning Standards
Board Ltd (FPSB), the preeminent
international standards-setting body for
financial planning and owner of the CFP,
CERTIFIED FINANCIAL PLANNER and CFP
Logo marks outside the U.S., convened a
panel of international financial planning
experts recently to develop tools and
content to guide entrants to the financial
planning profession on how to develop
viable financial plans. The samples and
guidance documents developed by the
panel will also support certifying bodies’
efforts to assess candidates’ ability to
competently practice financial planning.
Chaired by Wessel Oosthuizen, CFP,
director of financial planning law at the
University of the Free State in South Africa,
the six-member group finalised a global
financial planning case study based on
FPSB’s Financial Planner Competency
Profile, and will spend the next several
months drafting model financial plans
that demonstrate mastery of fundamental
financial planning practices and financial
planner professional skills. The case
study and financial plans will serve as
learning tools in practice-based teaching
environments and also as templates for
territory-specific assessments of financial
planner competency.
“There are many people who call
themselves financial planners, but they
don’t actually develop financial plans,” said
Lawrence Lynch, coordinator of financial
Brazil, India, Indonesia and China Lead
Global Growth of CFP Professionals
Denver: The Financial Planning
Standards Board Ltd (FPSB) recently
announced that its member
organisations in Brazil, India, Indonesia
and China achieved an average of 19.25
percent growth in the number of CFP
professionals in the first three months
of 2010.
For the quarter ended March 31, 2010,
Instituto Brasileiro de Certificação de
Profissionais Financeiros (IBCPF), an
FPSB Member since 2002, reported
Oosthuizen chaired the six-member group that finalised
a global financial planning case study based on FPSB’s
Financial Planner Competency Profile.
planning services and professor of financial
services at Fanshawe College in London,
Ontario, who participated in the panel. “By
providing the structure and framework for
how to create a financial plan, we’re giving
financial planners a tool that will not only
increase their professionalism, but also
benefit their clients.”
As the global standards-setting body
for financial planning, FPSB works with
its 23 member organisations around
the world so that consumers receive
a gain of 50 new CFP professionals, up
13 percent over the previous quarter.
FPSB India, an FPSB Member since 2001,
increased its number of CFP professionals
by 142, or 16 percent for the same period.
FPSB Indonesia, which joined FPSB in 2006,
added 104 CFP professionals in the first
quarter, up 29 percent from the previous
quarter, and FPSB China, a member since
2006, added 1,193 CFP professionals for an
increase of 19 percent.
“As individuals struggle to cope with
consistent, high-quality financial
planning advice. FPSB’s vision is to gain
recognition for financial planning as a
distinct professional practice, similar to
law, medicine or accounting.
“Consumers around the world have
common needs,” said John Green, a panel
member who also serves as professional
services manager for the Financial
Planning Association of Australia. “People
have concerns about education for
their children, as well as for their own
retirement and financial security. By
developing guidance for how to write a
viable financial plan, FPSB is building the
profession’s body of knowledge to help
financial planners satisfy the needs of
clients everywhere.”
In addition, to Oosthuizen, Lynch and
Green, panel members at the meeting
included Lucy Courtenay, education
director the Institute of Financial
Planning in Britain; Paul Grimes, CFP, chief
executive officer of FPSB Ireland and
a consultant and lecturer at University
College Dublin, Ireland; Ralph Jakob,
PhD, CFP, CEP, CFEP, academic director of
the Private Finance Institute, European
Business School, International University
Schloss Reichartshausen in Germany;
Mark Kordes, chairperson of CFP Board’s
Council on Education in the U.S.; and Kyra
Morris, CFP, president of Morris Financial
Concepts and founder of a U.S. residency
programme for financial planners.
uncertainty in the global financial markets,
we’re finding increased interest in financial
planning as a career choice. Those who
choose CFP certification meet rigorous initial
and on-going certification requirements,
and are committed to placing their clients’
interests first,” said Corinna Dieters, 2010
chairperson of FPSB’s Board of Directors. “In
territories like Brazil, India, Indonesia and
China, where financial planning is still an
emerging profession, career seekers are
embracing FPSB’s high standards of ethics
and professionalism, and are recognising
40 The 4E Journal

Starting Them Early
Denver: The Financial Planning
Association® (FPA®), the Academy of
Financial Services, Ameriprise Financial
and the Certified Financial Planner
Board of Standards, Inc. (CFP Board)
recently announced the 2010 Financial
Planning Challenge, a competition
designed exclusively for college and
university finance undergraduate degree
programmes registered with the CFP
Board, or related fields of study.
The groups developed the Financial
Planning Challenge to support the next
generation of financial planners by:
engaging students and programme
directors in the financial planning
community; raising awareness of career
opportunities; and encouraging learning
and networking in the financial planning
profession.
The Challenge’s inaugural year will feature
19 teams from 13 schools across the U.S.
who will compete to advance through
three phases:
1. Financial Planning Case Study
2. The “How Do You Know Challenge,”
a trivia-style financial planning
knowledge contest
3. Financial Planning Case Study
Presentation
In the first phase of the competition all
student teams have been given profiles for
two hypothetical clients. They will prepare
a client welcome letter and a one-page
summary outline of an Investment Policy
Statement that identifies the hypothetical
clients’ objectives, risk tolerance,
appropriate asset allocation ranges and
benchmarks for performance evaluation.
Student teams must also submit a written
explanation about how the investment
strategy fits into the hypothetical clients’
overall financial plan.
After the first phase is judged and
awarded, the top eight teams will advance
to the second phase of the competition.
Sponsored by the participating
organisations, teams will receive monetary
support to attend FPA Denver 2010 and
the AFS Annual Meeting to participate in
The Financial Planning
Challenge’s inaugural
year will feature 19
teams from 13 schools
across the U.S. who will
compete to advance
through three phases.
the “How Do You Know Challenge.” During
this question and answer trivia format,
teams will showcase their knowledge as
the host fires questions based on relevant
(continues to page 43)
CFP certification as the global symbol of
excellence in financial planning.”
The 2009 gains in these territories also were
impressive. Last year, the numbers of CFP
professionals in India and the People’s Republic
of China grew by nearly 80 percent over the
previous year, while Indonesia recorded an
increase of 41 percent and the number of CFP
professionals in Brazil rose 28 percent.
“The Chinese economy’s unprecedented
growth over the past 30 years has created
a great demand for financial planning
services,” said Feng Liu, PhD, chairperson
of FPSB China. “FPSB China introduced the
CFP certification programme at the right
time to meet the increased demand for
financial planners. We attribute the success
of the CFP certification programme in
China to the combination of strong global
standards and effective local practices.”
Brazil is also experiencing a period
of accelerated economic growth. Ulf
Mannhardt, CFP, president of IBCPF
said, “As incomes increase and more
consumers recognise the importance
and benefits of financial planning, the
need is growing for financial planners
seeking to distinguish themselves as
competent and ethical financial planners
through the world-class CFP certification
programme.”
Overall, the number of CFP professionals
grew in 2009 by 6.4 percent to more than
126,000 in the 23 territories where FPSB
has member organisations.
The 4E Journal 41

(continued to page 41)
financial planning subjects, similar to CFP®
exam topics. One winning team will be
announced and they, along with the other
seven teams, will advance to the final
phase of the competition.
In the final phase of the competition, all
teams must orally present their case
studies to a panel of judges and will then
be reviewed based on how well they
addressed the needs of the hypothetical
clients. The top three winning teams
will receive the following amounts of
scholarship money for their school:
• 1st Place Team: US$10,000
• 2nd Place Team: US$5,000
• 3rd Place Team: US$1,000
Additionally, the first place team
will receive the Career Coach Award
which will provide each team member
a complimentary one-hour career
coaching session from a financial
planning expert.
“FPA is proud to host this competition at
FPA Denver 2010, the largest gathering
of financial planning professionals, so we
can showcase the excellence of financial
planning students to the professional
community,” said Marv Tuttle, FPA
executive director and CEO. “We are
thrilled our co-organisers are joining
us in this important initiative. We want
to recognise, energise and encourage
students to pursue financial planning as
a profession, and use their commitment
to make a positive impact in the future.”
“We are pleased to be part of this effort
that will put our future financial planners
in real-world situations that give them the
experience they’ll need to succeed,” said
Kevin Keller, CEO of Certified Financial
Planner Board of Standards, Inc. “Our
partnerships show that the profession
of financial planning, especially those
who become Certified Financial Planner
certificants, continues to grow.”
“The Financial Planning Challenge is a
terrific opportunity for students to
demonstrate the skills they have acquired
through their programmes and receive
valuable feedback from leaders in the
financial planning community,” said
Kris Petersen, senior vice-president and
general manager of Financial Planning
and Advice at Ameriprise Financial. “We
are very excited to be a part of this unique
experience for students and believe that
now, more than ever, it is important to
help instill in the next generation of
financial advisers an understanding of
the profession and a commitment to the
principles of financial planning.”
Research Finds Significant
Software Improvements
Enhance Client Engagement
Denver: The Financial Planning
Association® (FPA®) recently released
the “FPA-ActiFi Adviser Technology
Reports: Financial Planning Edition,” a
survey report that compares and
contrasts 10 financial planning software
systems to help financial planners
determine the best technology for their
business. The research was conducted
by FPA and ActiFi Inc. and sponsored
by TD AMERITRADE Institutional.
The FPA-ActiFi Adviser Technology
Reports: Financial Planning Edition, the
second in a series of seven technology
research reports published by FPA
Press, reflects data gathered from
more than 300 financial planners
through a quantitative survey, detailed
vendor interviews and comprehensive
functionality testing. The report
provides a best-practice view of
how financial planning software
can improve business operations,
client service, client acquisition, and
profitability.
According to the financial planners
surveyed, 69 percent indicated
they primarily based their financial
planning software purchase decision
on functionality, 34 percent based it
on cost, and 23 percent based their
decision on a recommendation from a
friend or colleague.
Survey results also showed that
planning software has expanded
from an investment focus to address a
broader, more holistic set of client needs
that includes asset allocation, business
“FPA is pleased to
offer yet another
great tool which helps
financial planners
improve their business
operations and client
relationships.”
planning, cash management, estate
planning, goal setting, retirement
planning and more. This clearly
revealed that financial planning tools
have matured into more client-friendly
versions and the focus has shifted from
adviser-driven functionality to userfriendly
information for the client. With
the advanced technology, clients are
more actively engaged in the planning
process.
“FPA is pleased to offer yet another great
tool which helps financial planners
improve their business operations and
client relationships,” said Marv Tuttle,
executive director and CEO of the
Financial Planning Association. “Many
advisers believe financial planning
software is the most important
program they adapt for their business.
It’s terrific to see how technology has
advanced to engage clients more
and help them understand the full
planning process.”
“Financial planning software vendors
have evolved their product based on
considerable adviser feedback,” said
Spenser Segal, CEO of ActiFi. “It’s
interesting how they now enable
more effective client deliverables and
operational efficiency. While these
benefits are available, it still requires
the adviser to take a strategic look
at how they approach the planning
process, create client deliverables, and
monitor the planning process. These
new technologies introduce some
possibilities that weren’t available a
few years ago.”
“As advisers look to drive efficiencies
within their businesses, they now
have access to a comprehensive view
of today’s leading financial planning
software to help them make more
informed technology decisions,” said
Tom Bradley, president, TD Ameritrade
Institutional. “Through our sponsorship
and collaboration with the FPA we
solidify our commitment to provide
advisers with these types of important
practice management tools to help
them identify the best solutions for
their businesses and their clients and
ultimately may help increase their
productivity and profitability.”
The 4E Journal 43

BUSINESS MODEL
July - September 2010
Building a Professional Business
the MAAKL Way
By Grace Chan
Instrumental in designing the business model is MAAKL’s chief executive officer/ executive director, Wong Boon Choy.
The Malaysian financial services
industry has undergone significant
changes over the years and will
continue to evolve. And just like any other
industry in its early stages of development,
the financial planning profession has had
its share of growing pains.
One of the main areas where there is still
much deliberation amongst planners is
the financial planning model itself. Today
there are two models, namely the feebased
model which is more commonly
known as fee plus commission and
the fee-only model. The other aspect
is the approach itself which is either
the comprehensive financial planning
approach or the modular approach.
The Early Years
In 1983, the National Association of
Personal Financial Advisers (NAPFA) was
established. This paved the way for the
fee-only financial planning practice. But
for a 27-year-old organisation, NAPFA
currently has about 2,000 members.
As at December 31, 2009, there are
126,016 CFPs worldwide. The U.S. alone
has approximately 60,000 CFPs. As the
numbers would tell, only 3.3 percent of
CFPs in the U.S. are involved in fee-only
planning – an indication that although
there are many financial planners around,
the transition to fee-only approach is still
relatively slow.
The Malaysian Experience
Just as it took almost 30 years for NAPFA
to reach it 2,000 plus membership, we
believe the financial planning industry in
this country, which is just a little over 10
years old, has a lot to catch up on and that
the transition to fee-only planning will
also slow. But whether it is fee-based or
fee-only, each model has its own merits
as well as demerits and neither one is
necessarily better than the other.
At MAAKL, we are of the belief that feebased
or more commonly refered to as fee
plus commission model is still the way to
go for the time being. While it is possible
Malaysia would one day move to a feeonly
model, that day is likely to be several
decades away! The entire industry here
needs to mature to well beyond the U.S.
“The Malaysian financial
services industry has
undergone significant
changes over the years and
will continue to evolve.”
level of development for this to happen.
Not only are the planners themselves not
ready, we believe the consumers are also
not ready.
There is still much to be done here to
increase the awareness of the importance
of financial planning. Consumers need
to first understand what the value
proposition is from a financial planning
perspective. Only when they understand
what financial planning is all about, would
they begin to have expectations about
what a financial planner would be helping
them do.
The MAAKL Approach
We need a viable practice model for
Malaysia – a model that would sit
44 The 4E Journal

comfortably not only with the consumers
but also workable and profitable for
the planners. At MAAKL, we adopted a
fee-based, modular financial planning
approach. We are of the view that modular
financial planning is the more affordable
option for the majority of educated
Malaysian consumers. We currently focus
on two important financial needs, namely
retirement and children’s education.
And just how does MAAKL use its
proprietary fee-based, modular financial
planning model to provide the transition
for its planners to move from a unit trust
business to a financial planning business?
How does MAAKL structure its unit trust
business to fit into its planners’ financial
planning business? We have studied the
practices adopted by many successful
financial planning companies and distilled
our findings to five key elements:
1. Fee based on assets under
management (AUM)
2. Process-driven
3. Own book of business
4. Build long-term relationships and be
selective of clients
5. The practice can be sold
Instrumental in designing the business
model is MAAKL’s chief executive officer/
executive director, Wong Boon Choy,
who is also currently the president of the
Financial Planning Association of Malaysia
(FPAM). As one of the founding members
of FPAM and being partly responsible
for bringing the CFP mark to Malaysian
shores, it was clear from the beginning that
MAAKL’s business model would be closely
linked to the financial planning process.
What we started out to do at MAAKL was
to build a unique business model, called
the B.O.S.S. Model, by aligning various
business processes and integrating it into
the MAAKL business.
Free Based on
Assets Under Management (AUM)
Process Driven
Own Book of Business
Build Long Term Relationship
& Selective in Clients
Practice Can Be Sold
The Vital Building Blocks in
MAAKL
The practice of building the MAAKL
business on total client funds (TCF) is
consistent with the financial planning
practice, which is fee-based on AUM. Based
on what the advisers and planners have
built up at MAAKL, they are rewarded with
asset-based commissions (ABC) which
help them build their passive income
steadily (ABC is the monthly commission
paid out of the annual management fee
and computed based on TCF).
At MAAKL, we are certain the future lies in
the sustainable ABC and not on the shortterm
TBC (transaction-based commission)
paid out of the front-end fee or service
charge received from sales transactions. To
date, ABC has been a significant pull factor
and enticement for advisers and planners
alike to build their career with MAAKL.
Process-driven Business
Our philosophy is that the process is as
important as the products. Using the
uild Your Business
on Total Client Fund (TCF)
using MAAKL 6-Step Process
or MAAKL Money Map
wn Your Book of Business
ervice Your Target Client Well
ell Your Business
Financial Planning Standards Board
(FPSB)’s six-step financial planning
process as a blueprint, we developed
our own process-based selling
methodology known as the MAAKL
Six-Step Process, which encompasses
the important roles of a competent
and professional adviser. This process
helps our advisers secure high-quality
long-term clients professionally and
at the same time allow them to easily
assimilate and appreciate the financial
planning process.
Also, the MAAKL Money Map (MMM),
which is built from our own customised
modular financial plans, is also available
to our financial planners to assist clients
who require retirement planning and
children’s education planning. The plans
are part and parcel of our strategy to
provide value-added financial planning
services and to educate clients on
the importance of planning for their
future financial needs. The financial
planners earn income both from the
fees charged for the modular plans as
well as from commission from products
recommended.
STEPS
TOOLS
1. Make Your Services Known To Your Client
2. Analyse Your Client’s Financial Needs, Goals and Priorities
3. Ascertain Your Client’s Ability to Fund The Key Financial Goal(s)
4. Choose the Most Appropriate to Model Porfolio(s)
5. Look for the Most Appropriate Unit Trust Funds
6. Evaluate and Review Client’s Performance Regularly
MAAKL Planners
MAAKL Planners
MAAKL Dynamic
Allocation Model
Quarterly
Manager’s Picks
MAAKL
Home Office
The 4E Journal 45

Aziz with his son, Ray
& grandson, Kiern
My Happiness,
My Family,
My Legacy,
MyLife.
My life is filled with happiness. As a retiree I am doing things that I love and, as
a grandfather, I am spending more time with the people I love. My family means
everything to me and I want to make sure that they are well taken care of, even
after I am gone.
My investments must be stable and easily repeatable. I do not want to monitor
them everyday; so I must have trust in the people I invest with. Walton’s land
investments are both stable and hassle-free. My Walton Consultant is professional
and knowledgeable. With my Walton investments, I am on my way to securing my
legacy and my family’s future.
Visit www.mylifewithwalton.com to find out more.
Abdul Aziz Mustajab
Retiree & Grandfather
With over 30 years of experience, Walton is one of North America’s leading real
estate investment groups, managing over $2.2 billion USD ($2.5 billion CAD) of
land on behalf of over 60,000 investors globally. Walton has achieved a 28.24%*
average rate of return for our investors, a track record verified and audited by
PricewaterhouseCoopers LLP.
* This is a weighted average simple annualized rate of return. Audit performed by PricewaterhouseCoopers
LLP (Canada) dated April 20, 2010. The complete audit report may be requested through your Walton
representative or is available online at www.waltoninternational.com
Past performance is not necessarily indicative of future results.
Corporate Services Hotline 1800 88 WALTON (925866)
Walton International Property Group (M) Sdn Bhd
8/F Wisma Genting, 28 Jalan Sultan Ismail, 50250 Kuala Lumpur Malaysia
© Walton International Group Inc. 2010

Owning the Book of Business
We believe that loyalty comes about
when advisers and planners are allowed
to own their book of business. With this
concept of owning their own book, we
have placed them on a partnership level
with MAAKL. They are no longer a mere
salesperson but a business owner in their
own right and our partner.
Top-Notch Service
How are our advisers and planners able to
provide high quality personalised service
to their clients? They can do so because of
two main factors :
1. ABC – the incentive and motivation
which come with receiving their
attractive and passive ABC income;
and
2. Innovative and award-winning
tool such as the MAAKL Home
Office (MHO) Version 3 – MAAKL’s
comprehensive suite of knowledgebased
tools to help advisers
build a successful business
professionally. The MHO includes
the MAAKL Planners, Client Account
Management system or CAMS,
What-If-Analysis, Fund Price/Index
History, e-Sales and e-Recruitment
Presentation Library.
It is this level of innovation in combination
with our technology-focused philosophy
which sets MAAKL apart from the others. It
is also based on our belief that ‘a carpenter
is only as good as his tools’. In March 2008,
Microsoft awarded the Version 3 MHO
with the Windows in Financial Services
Award at Microsoft’s conference in New
York alongside with four other awardees
namely Chicago Mercantile Exchange,
Bank of America, Merrill Lynch and Piraeus
Bank in other areas. MAAKL was the first
company in the Asia-Pacific to receive this
award.
Our advisers and planners also enjoy a
wide variety of financial products using
a multi-manager platform. Our three
“There is still much to be
done here to increase
the awareness of the
importance of financial
planning.”
Financial
Planner
fund managers are Meridian Asset
Management, CIMB Asset Management
and HwangDBS Investment Management.
We also have the MAAKL Flexi Series
which is unique within Malaysia’s unit
trust landscape. These funds share the
same objective and strategy, but are
managed by different fund managers.
In addition to wealth accumulation, our
services also extend to include wealth
protection as well as wealth distribution
planning. In our approach to ensure
holistic financial services are provided,
we have formed strategic partnerships
with a few selected partners such as OSK
Trustees Bhd for estate planning and trust
services and MAA Assurance and MAA
Takaful Bhd for conventional and takaful
term life, personal accident and critical
illness plans.
Financial planners at MAAKL are also
challenged to live up to the industry’s
expectation of greater accountability,
competency and commitment in their
financial planning services to their clients.
They are required to apply for the Capital
Market Services Representative License
(CMSRL) under MAAKL as it is required by
the country’s legislation under the Capital
Markets & Services Act 2007 (that requires
a person to be licensed before he can hold
himself out to be a financial planner or
else face a RM1 million fine and 10 years
imprisonment).
Selling the Business
FEE
TBC
Level 1 Level 2 Level 3
FEE
Like all successful businesses, it is
important that there is an exit mechanism.
ABC
TBC
ABC
ABC
Unit Trust
Specialist
TBC
ABC
MAAKL provides advisers and planners
with an option to sell their business
should there be a need for them to exit for
whatever reason.
MAAKL’s Business Hierarchy
At MAAKL, we have developed a business
growth path for both our advisers and
planners. Our advisers can ultimately
choose to grow their business by
becoming a unit trust specialist or a
financial planner. The model for a unit
trust specialist takes the adviser from
being largely dependent on the shortterm
TBC at the initial stage to being
remunerated with the longer term and
more sustainable ABC (at the top right of
the pinnacle).
The path for financial planners starts
pretty the same way a unit trust specialist
would and are remunerated with more
TBC than ABC. However, in the long run,
and as part of long-term plan for financial
planners, they will have the flexibility to
progress from fee-based to fee-only (at
the top left of pinnacle).
If you are keen on the financial planner
path or the path of a unit trust specialist
and would like more information on our
business model, do contact us at +60-3-
2146 9588 or visit at our website at www.
maaklmutual.com.my.
Grace Chan, CFP® is the senior manager
of the Financial Planning Department
of MAAKL Mutual Bhd and a Securities
Commissioned-licensed financial planner.
The 4E Journal 47

BUSINESS MODEL
July - September 2010
By Dennis Tan
Building on
the Right Platform
The Future of Financial Services
Not too long ago, constructing a
comprehensive, personal financial plan
was not only a difficult, but also tedious
task. The different parts of a complete
financial plan were, more often than not,
offered by a host of product providers.
And these products were typically sold
by tied agents who were legally bound to
represent and protect the interest of their
principal.
In other words, consumers in Malaysia
were not only lacking a ‘one-stop centre’
for their financial planning needs, but
they were also being pushed products
by agents who may not have the clients’
interest foremost on their minds.
The advent of the Capital Market Services
Act 2007 heralded a new beginning for
consumers in Malaysia. The regulatory
changes paved the way for a new breed
of personal finance intermediaries – one
who truly represents the interests of the
client, offers comprehensive financial
planning and is able to advise on an
entire range of investment options. So
the day the average consumers can enjoy
independent, objective and competent
financial advisory services has finally
arrived.
iFAST Capital: Malaysia’s
Integrated Wealth Management
Platform
iFAST Capital started its wealth
management platform business in
2008 with the sole aim of providing a
comprehensive range of investment
products and services that will help
precipitate the growth of advisers in
Malaysia and the region. It is a holder
of a Capital Market Services License
(CMSL) and is licensed by the Securities
Commission to offer unit trusts and
investment advisory services. It is
also registered with the Federation of
Investment Managers Malaysia (FiMM) as
an institutional unit trust adviser (IUTA).
Our Business Model
We offer unit trust platform services
to our clients who comprise mainly of
corporate unit trust advisers (CUTAs) and
IUTAs. For companies who wish to deal
in unit trusts and offer comprehensive
financial planning, we also offer
consultancy services with respect to
CMSL application as well as CUTA and
IUTA registration with FiMM. In addition,
we service the ‘do-it-yourself (DIY)’ retail
investors through our Fundsupermart.
com retail distribution arm which offers
lower sales charges when compared
to investing through sales agents and
banks.
Corporate Unit Trust Advisers (CUTAs)
Institutional Unit Trust Advisers (IUTA)
Fundsupermart.com
Adviser-assisted investors
Adviser-assisted investors
Self-directed investors
48 The 4E Journal

Consolidated Dealing
and Administration
Online Services
Training and Research
Custodian and
Register
Business Management
Reporting
CRM and Financial
Planning Software
ONE transaction form
ONE cheque payment
ONE location
ONE consolidated
statements for
investments
Round-the-clock
acess to latest
valuations of your
clients’ assets
Create and approve
transaction by keying
in unique password
via secured logins
Regular training
sessions cover topics
from basic operation
to advance course
at no extra costs
Research updates
from fund managers
and iFAST in
house research team
Safekeeping of your
client’s assets
and
maintain client’s
register
Reporting tools
for tracking or
sales performance
End-to-end
software solution
developed to provide
a comprehensive
range of tools
and information
iFast Platform Products and Services
Range of Platform Services
In our quest to provide an environment
where advisers can best serve their
clients, we provide them with a
complete range of services and support
including consolidated dealing and
administration, online transaction and
software solutions, training and research
support, wrap account management,
customer relationship management
(CRM) technology and business reporting.
Through our platform, advisers gain
access to more than 130 unit trusts from
13 different local and international fund
managers.
Further, our iPASS module enables
advisers to initiate transactions online.
Advisers create transactions which are
then routed to clients for review and
authorisation. As such, a transaction can
be processed whenever and wherever
the advisers and customers may be. This
speed and flexibility becomes critical
when executing urgent transactions,
especially in volatile market conditions.
It is this commitment to help advisers be
more effective and efficient that has made
us Malaysia’s leading Integrated Wealth
Management Platform.
Wrap Account
These are cash management facilities
which facilitate the transactions of funds
and other investment products on the
iFAST platform. Both are excellent ‘parking’
facilities as they allow clients to redeem
and make payments on their investments
conveniently.
In return for this on-going service,
advisers can apply an annual wrap fee
of up to 1.5 percent based on the value
of all investment products wrapped in
the clients’ accounts. The annual wrap
fee will be deducted directly from the
portfolio on a quarterly basis. This
provides a regular income stream to the
advisers.
Alternatively, if the clients do not require
active portfolio management, their
advisers can recommend the opening
of non-wrap accounts. The clients will
incur sales charges for every new fund
transaction.
Why it Makes Sense to Use
iFast’s Platform Services
1Access to a wide range of unit
trusts – 137 and counting!
No other online unit trust platform offers
as many funds as iFAST Capital. An adviser
should not be limited by the products
offered by a single product provider, or
have to approach various providers in
search of the right funds. We make it easy
with our continuously expanding range of
funds – 137 and counting!
Efficiency
2 of Transactions
Gone are the days when purchase
transactions entail making out separate
cheques and receiving separate
statements and reports from each fund
house. On the iFast platform, you need
only prepare one form, make one payment,
and receive one consolidated statement
regardless of the number of fund houses.
You spend less time on unnecessary paper
work and have a clearer overall view of
your investment holdings.
3 Online
Transaction
Imagine: You are on an overseas trip and
the markets have just moved dramatically.
You want to rebalance your clients’
portfolio as soon as possible but you are
not physically in Malaysia to sign on the
transaction forms. So you start to regret
and worry about your clients’ portfolios.
This won’t happen if you use iFAST. Our
wireless and paperless transaction
The iFAST Capital wrap account is a
cutting-edge facility. It allows advisers to
‘wrap’ all their clients’ investments into a
single account. Both advisers and clients
are able to view the clients’ investment
portfolios in totality and execute
transactions online on the iFAST platform
at anytime, anywhere.
New Lump Sum
Investments
Unit Trusts
Transfer of unit trust holdings
from other distributors
Regular
Investments
With an overall view of their clients’
portfolios, advisers can make
recommendations for their clients on a
holistic level and manage their portfolios
more effectively. Advisers will find it easier
to identify weaknesses and fine-tune their
clients’ portfolios.
Wrap Account
Parking Facilities
(Cast Account and Cast Management Fund)
In addition, the wrap account features a
cash account and cash management fund.
Consolidated Reports & Statements
Consolidated Viewing of Holdings
The 4E Journal 49

environment ensures that you and your
clients are able to make the necessary
transactions in the shortest time possible
with just a mouse click.
4 Free
Switching
Free switching is available for wrap
accounts. Advisers are able to rebalance
portfolios and switch between funds from
different fund houses as many times as
they wish without incurring extra charges.
This makes portfolio changes very cost
efficient.
5 Alignment
with Clients’ Interest
The wrap account aligns the interests
of the unit trust investors, the CUTAs,
advisers, iFAST Capital, and the fund
management companies. A ‘win-win’
situation is created and everyone would
benefit only when the net asset value
(NAV) of the investment grows. The more
the investment grows, the more everyone
earns.
Training and
6 Research Support
Our training sessions cover topics ranging
from investment planning to economic
and market analysis. In addition, we
conduct monthly updates on market
outlook and fund manager presentations.
Our team of research analysts maintains
five distinct ‘Recommended Portfolios’
and a ‘Recommended Unit Trusts’ list
which are reviewed regularly. These are
provided at no extra cost to advisers.
Independent Unit Trust
7 Consultant (IUTC) Initiative
In line with our goal of bringing
independent financial advice to
consumers, our latest initiative is a
training programme to groom unit
trust consultants (UTCs), insurance
agents and fresh graduates to become
the next generation of independent
financial planners. There is definitely a
shortage of qualified financial planners
“The mobility offered
to IUTCs should
encourage more
people to enter the
unit trust industry
and build their client
assets with us.”
and hence we, along with our partner
CUTAs, are striving to fill this vacuum in
human capital by expanding the pool of
potential financial planners. We believe
that our IUTC initiative will give a much
needed boost to the growth of the
independent financial planning industry
in Malaysia.
Our group chairman and CEO Lim
Chung Chun has always said, “We will
consistently adopt ‘win-win’ solutions for
all our stakeholders — whether clients,
employees or shareholders — and
emphasise a long-term view in decisionmaking.”
Under this programme, IUTCs are taken
under our wings until they attain their
qualified financial planner accreditations.
For the duration of the programme,
training is given to the IUTCs as they
pursue their qualifications. At the same
time, the IUTCs will get to grow their sales,
asset under management (AUM) and
client base.
Upon completion of the necessary
requirements to become a licensed
financial planner, the IUTCs are then
Recruit
iFAST Independent
Unit Trust
Consultant
“We will consistently adopt ‘win-win’
solutions for all our stakeholders
— whether clients, employees or
shareholders — and emphasise a
long-term view in decision-making.”
- Lim Chung Chun, Chairman and CEO,
iFAST Corporation Pte Ltd
EXISTING BUSINESS MODEL
Platform Services
NEW IUTC INITIATIVE
Develop & GROW
transferred to our partner CUTAs. They will
retain full ownership of the client assets
which they have built up during their
tenure with iFAST Capital.
This model compares very favourably
against the tied agency model that is
widely practised currently. Under the tied
agency model, client assets remain with
the unit trust management companies
(UTMCs) even after the tied agent has left
the company. This makes it unattractive
for tied agents to pursue a career as an
independent financial planner as it would
mean resigning from their UTMCs and
hence, forfeiting client assets that they
have built up over the years.
The mobility offered to IUTCs should
encourage more people to enter the unit
trust industry and build their client assets
with us.
For more information, please call us at
+60-3-2149 0600 or email us at: info.my@
ifastfinancial.com
Dennis Tan is the managing director of iFast
Capital Sdn Bhd.
CUTA A
CUTA B
CUTA C
Supply
Licensed
Financial Planners
50 The 4E Journal

CE COURSES
July - September 2010
Foreign Exchange and Derivatives Strategies: Instruments & Practical Solutions for Private Clients
(A Securities Commission CPE-accredited course)
Speaker:
Ding Lai Hong
Date: October 9, 2010 / Saturday [ full day ]
Venue:
Dewan Berjaya, Bukit Kiara Equestrian & Country Resort
Jalan Bukit Kiara, 60000 Kuala Lumpur
Registration: 8:30AM – 9:00AM
Time:
9:00AM – 5:00PM
Fee:
Early Bird Special – RM280 ( FPAM Member) , RM350 (Public)
by October 1, 2010
Normal – RM320 ( FPAM Member), RM380 (Public)
Global Issues Influencing the Capital Market
(A Securities Commission CPE-accredited course)
Speaker:
Anthony Dass
Date: October 11, 2010 / Monday [ full day ]
Venue:
Beverly Hotel
Kota Kinabalu, Sabah
Registration: 8:30AM – 9:00AM
Time:
9:00AM – 5:00PM
Fee:
Early Bird Special – RM120 ( FPAM Member) , RM150 (Public)
by September 30, 2010
Normal – RM150 ( FPAM Member), RM180 (Public)
10 CE
points
10 CE
points
10 CPE
points
10 CPE
points
The Investment Plan Is Your Blueprint for Success – And How You Can Accumulate Wealth and Sleep Well
(A Securities Commission CPE-accredited course)
Speaker:
Mike Lee Chee Thye
Date: October 16, 2010 / Saturday [ full day ]
Venue:
Tower Regency Hotel
Ipoh, Perak
Registration: 8:30AM – 9:00AM
Time:
9:00AM – 5:00PM
Fee:
Normal – RM120 ( FPAM Member), RM160 (Public)
How To Invest Sensibly With Options
(A Securities Commission CPE-accredited course)
Speaker:
Wai-Yee Chen
Date: November 10, 2010 / Wednesday [ full day ]
Venue:
Dewan Berjaya, Bukit Kiara Equestrian & Country Resort
Jalan Bukit Kiara, 60000 Kuala Lumpur
Registration: 8:30AM – 9:00AM
Time:
9:00AM – 5:00PM
Fee:
Early Bird Special – RM350 ( FPAM Member) , RM500 (Public)
by November 1, 2010
Normal – RM400 ( FPAM Member), RM550 (Public)
Approaches to Equity Valuation
(A Securities Commission CPE-accredited course)
Speaker:
Wong Kah Teck
Date: December 4, 2010 / Saturday [ full day ]
Venue:
Dewan Berjaya, Bukit Kiara Equestrian & Country Resort
Jalan Bukit Kiara, 60000 Kuala Lumpur
Registration: 8:30AM – 9:00AM
Time:
9:00AM – 5:00PM
Fee:
Early Bird Special – RM280 ( FPAM Member) , RM350 (Public)
by December 1, 2010
Normal – RM320 ( FPAM Member) , RM380 (Public)
Declaration of Trust – Protection of Equitable Interest and Distribution of Assets
(A Securities Commission CPE-accredited course)
Speaker:
Azhar Iskandar Hew
Date: January 29, 2011 / Saturday [ full day ]
Venue:
Dewan Berjaya, Bukit Kiara Equestrian & Country Resort
Jalan Bukit Kiara, 60000 Kuala Lumpur
Registration: 8:30AM – 9:00AM
Time:
9:00AM – 5:00PM
Fee:
Early Bird Special – RM280 ( FPAM Member) , RM350 (Public)
by January 1, 2010
Normal – RM320 ( FPAM Member) , RM380 (Public)
Note: Programmes are subject to changes.
10 CE
points
10 CE
points
10 CE
points
10 CE
points
10 CPE
points
10 CPE
points
10 CPE
points
10 CPE
points
The 4E Journal 51