Next Generation Investors Look To Personalised And Digital Offerings – SC Chairman

Financial planners and advisers must be ready to offer investment advice that is attuned to the needs of this next generation of tech-first millennial investors.

Securities Commission Malaysia (SC) chairman Datuk Seri Dr Awang Adek Hussin made this observation in his keynote address at the Financial Planning Association of Malaysia (FPAM) Financial Planning Symposium 2024.

This year the symposium focused on key trends to help financial planners to be better equipped to ride the winds of change that will come with this intergenerational wealth transfer.

Over 600 participants attended sessions hosted by global experts on money laundering, generative AI, the impending impact of e-invoicing, ESG compliance in investing and Malaysia’s capital markets with a focus on exchange-traded funds (ETFs).

FPAM line up of speakers shared valuable insights to help empower financial planners to navigate this evolving industry.

Baby boomers are passing their wealth to their children

Malaysians born between the 50s and 60s, are now retiring and passing on their wealth to the next generation. The SC chairman highlighted this move will also lead to a change in investment patterns in the future.

“According to HSBC2, Asia is expected to see a US$ 1.9 trillion transfer of wealth in the coming years.

“This is likely to be the largest intergenerational wealth transfer in history, with far reaching implications for the global capital markets,” Datuk Seri Dr Awang Adek observed.

He added that the financial planning industry must act on this opportunity. These winds of change can lead to more growth in the industry and deepen the quality of financial planning services.

Growing interest in sustainability among millennial investors

“According to a survey by the Institute of Capital Market Research (ICMR), more than 70% of millennials and Gen Zs are “more likely to invest in options that also promote sustainability and good causes,” he added.

He also urged financial planners to increase their understanding and develop their capabilities in this area. In particular, he highlighted that retail investors may lack knowledge about sustainable investments like ESG or SRI Funds.

Besides sustainable investments, the SC chairman also touched on sustainable savings for retirements.

“Malaysia’s retirement security is a big concern, which has been exacerbated by the pandemic and EPF withdrawals that were allowed during that time.

“Against this backdrop, we are also seeing long-term structural trends such as an ageing population, digitalisation and the changing nature of work,” he said.

He urged the financial planning profession to do their part to education their clients on the importance of supplementing their public mandatory retirement scheme, and better cater to the local retirement savings needs of their clients.