By FARA AISYAH / Pic By AFIF ABD HALIM
The Financial Education Network (FEN) should be introduced in higher learning institutions rather than integrating it only into the school curriculums, says Deputy Finance Minister I Datuk Othman Aziz.
Othman said the younger population perceived that long-term financial planning is only for the next 10 to 15 years when in fact the most crucial part is in the retirement age.
“The exposure to financial literacy is important for our undergraduate students as they need to know how to control their expenses, reducing them and actually save some money,” he told reporters at the Annual Financial Planning Signature Conference (AFPSC) 2017 in Kuala Lumpur yesterday.
Othman said the introduction of FEN by Bank Negara Malaysia (BNM) last year was due to the fact that Malaysians have a low financial literacy level as measured by financial knowledge, attitudes and behaviours.
Based on BNM’s report, only 40% of Malaysians are financially ready for retirement.
A recent focus group discussion with retirees shows that they would still rely on their children or purchase using credit in the event of emergency or for higher value items, possibly a result of lack of financial planning when they were younger.
BNM’s collaboration with the Education Ministry has successfully integrated basic financial education elements into the school curriculum beginning 2014, which will be expanded to all primary and secondary school levels by 2021.
Othman said it is also crucial for people, especially the young generation to get the right advice from certified financial planners to avoid unwanted circumstances in the future.
A conference like AFPSC, he said, would be able to educate the licensed financial planners in dispensing financial advice with integrity, as the business is based on trust between the planner and the client.
Meanwhile, Malaysian Financial Planning Council president Michael Kok Fook On said Malaysians have more avenues to invest and grow their wealth now as disruptive innovation is fundamentally changing the way the world works.
One of the examples for such platform is the peer-to-peer lending — the practice of lending money to individuals or businesses through online services that match lenders with borrowers.
“Financial freedom is becoming more attainable for a wider spectrum of society. Wealth management has certainly seen tremendous success in many markets the world over.
“For instance, Alipay’s Yu’E Bao which is one of China’s most popular Internet-based funds has amassed 1.43 trillion yuan (RM919.49 billion) as end of June, in comparison with Bank of China’s 1.6 trillion yuan of the same period,” Kok concluded.