As some of you will be aware, I have been working hard with my colleagues at the LIIA to help increase the advice standards in Malaysia, through developing a progressive qualification pathway which will increase the advisory standards in Malaysia.
Labuan in Move to be a Top International Insurance Centre
“Labuan, a group of tiny islands off the coast of Malaysia, this month is pulling the wraps off an ambitious plan to transform the regulation of its insurance industry.
It is counting on the introduction of a new regulatory environment to enable it to further develop its own insurance industry – and by association, that of Malaysia, of which Labuan is a part.
As part of this effort to raise the jurisdiction’s regulatory bar, a new qualification regime has been drawn up, with the intention of setting rigorous and consistent standards for insurance brokers active in Labuan and Malaysia who look after international clients. As part of the scheme, these brokers will be listed, on a central database, to enable would-be clients to find them easily.
These measures are being paired with a marketing campaign that aims to ensure that all expats and other potential clients living in Malaysia know that they should do business only with qualified IFAs and brokers while there.
“By the end of next year, every adviser in Malaysia who looks after expat high-net-worth Malaysian clients will have a minimum of the Chartered Insurance Institute’s Certificate in Financial Planning (CFP),” said Stuart Yeomans, group chief executive and partner of Kuala Lumpur-based expat-specialist advisers Farringdon Group, and member of the council of the Labuan International Insurance Association (LIIA), an insurance industry trade group.
“This will effectively pole-vault Malaysia, as a jurisdiction, to being at least the equivalent of the UK, qualification-wise.”
One side effect of this strategy is expected to be the quick end to what is said to be a relatively widespread practice – for now – of financial advisers and insurance brokers “tripping in” to Malaysia to look after foreign clients there, in spite of not holding the necessary Malaysian licences.
A crackdown on such in-tripping brokers has already begun, Yeomans said…….
The qualification pathway began on the 1st of September 2012
Features of the new standard
The new minimum standard for advisers in Labuan and Malaysia is described as being equal to the UK’s “CFP4” level, and is being accompanied, as it is in the UK, by a requirement for 35 hours a year of continual professional development.
Where it departs from the UK norm, though, is in the fact that it has been developed in a “matrix” format that provides a standard certification for individuals whose qualifications are based on different countries’ exams – for example, Australian, Malaysian, Singaporean or American, as well as British, according to Yeomans.
Another feature is a compulsory three-and-a-half-day “induction” course, the first of which will begin being held this month, which is aimed at all advisers currently practicing in Malaysia.
This is seen as an ongoing scheme that ultimately will aim to reach all new foreign IFAs and insurance brokers, to ensure they are up to speed on such topics as the Malaysian tax system, anti-money-laundering rules, and the full range of investment products available in the Malaysian market to foreign clients.
A half day of ethics training is included as part of the programme, as it has been drawn up, and all advisers – who will, as part of the new regime, be required to join the CII and MII – as a matter of course be expected to comply with the CII’s ethics code.
According to Yeomans, the induction course is a step beyond what most if not all other jurisdictions currently offer.”
I am going to publish a full detailed story about this new qualification pathway, which give you a detailed view into Labuan and Malaysia’s plans for the future!
I hope that you enjoyed reading.