Bank Negara to simplify FAR licencing
Originally posted on 2 June 2014
Bank Negara Malaysia (BNM) is simplifying the process of obtaining financial adviser’s representative (FAR) licence in order to attract more FARs and is expected to make an announcement some time this month.
A source close to the matter told SunBiz that the modules for Certified Financial Planner (CFP) and Registered Financial Planner (RFP) qualifications will be reduced to three.
Currently, there are six modules under CFP and seven modules under RFP and each module takes some 42 hours.
“BNM wants to get more people into the industry. As of Sept 30, 2013, there are only 281 FARs and it has been like this for a long time,” he said, adding that it will be easier and less time-consuming for those interested to be FARs.
On concerns over the lowering of standards of FARs, the source said that Malaysia has one of the highest qualifications for FARs and is the most stringent among neighbouring countries.
He said with the simplified process, FARs only need to undertake Modules 1, 2 and 3 to obtain the RFP qualification, which is conferred by the Malaysian Financial Planning Council.
Meanwhile, the Securities Commission is also expected to simplify the process of obtaining New Capital Markets Services Licence (CMSL) and New Capital Markets Services Representative’s Licence (CMSRL).
The source said similarly, the SC will also reduce the requirements to three modules.
The definition of FARs according to BNM, are individuals in direct employment of, or acting for, or by arrangement with, a financial adviser (FA).
FARs perform for the FA any of the functions of a FA (other than work ordinarily performed by accountants, clerks or cashiers), whether his remuneration (if any) is by way of salary, wages, commission or otherwise, and includes an officer of the FA who performs for the FA any of those functions.
The activities of FAs include analysing the financial planning needs of an individual relating to insurance products, recommending the appropriate insurance products, sourcing insurance products from insurers or arranging of contracts in respect of insurance products.
FAs are licensed under the Insurance Act as a category of intermediaries. In addition to insurance products, they may also provide advice and market other financial products subject to prior approval from the relevant authorities.
FAs are responsible for providing holistic financial advisory services to consumers, ranging from insurance protection, savings for education, retirement planning and investments for the future.
According to previous news reports, the Malaysian insurance market is expected to see premiums increase by an average of 7% a year and will more than double in size by 2024 from RM45.6 billion in total premiums recorded in 2013.
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