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Amendments to the Guidelines on Unit Trust Funds are currently underway to lay the foundations to narrow the gap between the requirements for domestic funds and funds in other major markets. A key outcome of this effort will be to increase the attractiveness of domestic funds to both domestic and foreign investors, which will further boost the growth of the unit trust industry. This entails broadening the definitions for permissible investments and eligible markets for domestic funds to invest, in line with other international fund centres. The liberalisation of investment strategies and asset classes, balanced with exposure limits, will enable investments into new asset classes, such as digital assets and commodity derivatives. Efforts will also be taken to further enhance the efficiency of portfolio management, including expanding the scope of securities lending and allowing repurchase transactions to include foreign markets.
3.2.2 FOSTERING ACCESSIBLE AND QUALITY INVESTMENT ADVICE
Malaysian investors today largely obtain investment advice from their own families, investment experts, bankers as well as unit trust consultants or agents22. In cases where advisors are unlicensed, investors risk getting poor advice and making uninformed investment decisions. Some advisors represent product manufacturers and tend to provide product-centric advice, which may not cater to investors that are seeking for more tailored advice. As the Malaysian investor landscape continues to mature, there will be a need for greater variety of investment advisory models in the market.
Diagram 8
BROADER TYPES OF ADVISORY MODELS TO CATER FOR SPECTRUM OF INVESTOR NEEDS (ILLUSTRATIVE)
Investors’ advisory needs
Types of investment intermediary models
Investors who prefer self-directed investments and do not need advice
general investment recommendation on products or asset classes, without considering personal circumstances
tailored advice and solutions, based on their needs, risk appetite and investment goals
Investors who want
Investors who want
Execution-only
Non-personal Advice
Personal Advice
Provision of execution-only services without advice
Example: online distribution platforms and stockbrokers
Provision of investment recommendations without taking into account personal circumstances of the investor
Example: investment experts or advisors
Provision of investment recommendations taking into account personal circumstances of the investor, which can be standardised or customised across range of asset classes
Example: robo-advisors, FPs and wealth advisors
Source: SC.
22
Nationwide Survey Report, Federation of Investment Managers Malaysia (FIMM), 2019.
CAPITAL MARKET MASTERPLAN 3
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