International Adviser Future Advisory Forum Kuala Lumpur, Panel Debate

Simon Cook, Managing Director of Intelligent Investments was once again asked to participate in the panel debate at the 2016 Future Advisory Forum, Kuala Lumpur that was organised by International Adviser Magazine to discuss the challenges and opportunities facing the market in Malaysia.  He was joined by fellow industry panellists; Stuart Yeomans, CEO of the Farringdon Group and Graham Morrall, Global Sales and Marketing Director of Hansard International.

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Fees vs Commissions

The main discussion centred around the future of the financial industry and whether Labuan and Malaysia would evolve along a commission or fee based model, as has been adopted in other regulated centres.

Graham Morrall of Hansard commented that there is no right approach to this, and that each jurisdiction has to decide which is the right approach to adopt and that this would vary depending upon the idiosyncrasies of each individual market.  Simon Cook and Intelligent Investments is strongly of the belief that clients deserve the highest level of service and global markets should evolve to ensure financial advice is in a client’s best interests, including greater transparency in fees and charges.  It doesn’t matter how an adviser is remunerated as long as the client fully understands their remuneration and how it impacts a client’s investment, as well as the basis on which advice is being given i.e. is it in a client’s best interest or simply to generate a large, hidden commission.

Intelligent Investments is a strong believer in moving towards fee based remuneration, as this fully enables an advisor to provide best advice for a client without being biased by a commission paid by a fund or product provider.   During the question and answer session, there were several opponents from the local industry who believe that their business in Malaysia would be jeopardised by revealing their levels of remuneration to clients, and that Malaysia simply isn’t ready for transparency of advisers remuneration.  Simon Cook countered this with the argument that regardless of where in the world a client is located that surely they deserve to know how much a professional is being paid for providing advice and what the motivation for the advice that is being offered comes from.

Discretionary Fund Managers (DFM’s)

The discussion then moved on to the use of discretionary fund managers or DFM’s which have developed due to increasing regulatory and compliance requirements in developed markets such as the UK.

Simon Cook of Intelligent Investments Limited believes that DFM solutions are the future of the wealth management industry, as very few firms have sufficient in house capabilities to provide professional asset management and that gone are the days of advisers selling ‘the fund of the month!’.  The various DFM solutions that are emerging provide a client with clarity and independence and an advisory companies job with regards to asset management should be a mandated evaluation of DFMs to ensure that they are managing the funds within a client’s risk and return parameters and that the clients goals are being achieved.  Stuart Yeomans of the Farringdon Group commented that he believes that DFMs have a place but most of the asset management can still be carried out in house within individual advisory firms.  

Intelligent Investments Limited strongly believes in transparency of advice.  To find out more please click here.

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