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The Reality of Wealth Management in Malaysia

Wealth Management has been defined as many things. Some parties go as far as calling it bespoke advisory service, while there are others who see Wealth Management as another distribution business to enable consumers to gain access to various investment products like unit trust, dual-currency investment, structured investment products, etc.

In Malaysia, it is quite common for wealth management services to be made available to the priority or premier banking customers. For one, these customers possess sufficient assets and therefore are deemed to have a high propensity to invest.

Yet despite the potential to do more for wealth management clients, there’s a growing number of customers who are questioning the very mechanics of which wealth management was founded.

To get a true insider’s reflection on what is happening, I spoke to several clients on their past experiences with their wealth management providers from major financial institutions. To ensure objectivity, I also sought the viewpoints from wealth managers themselves to understand what actually transpires in a typical client-bank wealth manager’s relationship.

The following are excerpts from our conversation:

Client 1:

I just received a call from my wealth manager, informing me of a new investment product that has just been launched by the bank. I was told that this new product is ‘better’ than what is being offered by other banks and it can potentially get me ‘attractive’ returns if I invest now when the timing is right.

I find myself wondering how my banker knows whether the product is indeed right for me or does he say it to ALL his customers?


Wealth Manager 1:

I have just managed to contact one of my priority banking customers to inform him of a new investment product launch. He is among the hundreds of customers on my list whom I need to call to generate interest in the product. I am hoping that he would sign up. HQ has assigned a sales quota to every branch, as is the norm for new product launches. Everyone will be pushing to hit the targets to achieve their KPI and possibly make an impact on our year-end bonus and increment as well.


Client 2:

This is all terribly confusing. Only last week, another sales personnel from my other bank called to say that they are having a promotion on a private equity fund. Customers who sign up will receive some special incentives.

I do not mind checking out what this new investment product is all about, but I already have a lot of investment products in my portfolio. What would be the benefit of investing in something that I already have? Do I really need more of the same category of investment products? If only somebody could tell me.


Wealth Manager 2:

To study every single client’s overall financial position and analyse their portfolios requires a lot of time – something we don’t have. Wealth Managers are expected to handle day-to-day walk in customers, and there is a whole shelf of investment or insurance products that we need to sell besides keeping up with the latest product launches. At the end of the day, we are tired and stressed out with the pressures of the job. 

Our time is better utilised for sales which would translate into performance bonuses and commissions.


Client 3:

I have investment assets with a number of financial institutions. Normally each financial institution will present a report to me showing how my assets are performing, but each report comes to me at different times in different formats. I find it quite impossible to compare all my assets at one go.


Wealth Manager 3:

Customers expect to be serviced by knowledgeable and experienced relationship managers to provide a holistic view of their personal finance. However, I am only privy to my customer’s records within our own bank. I have no idea what assets or liabilities he has with other financial institutions. Even if the customer shows me those records, it is not feasible to piece together everything into our system. As such, I cannot offer him advice on any investments outside our bank. He will need to go to each bank individually for that.


Client 4:

My monies are invested in different asset classes, like properties, local and foreign equities, bonds, REITs and also in cash holdings. The problem is, these are all over the place – with different banks, unit trust companies, agents, etc. It is easy for me to lose track of what I already have and sometimes I end up investing too much where I shouldn’t and vice versa.  

Furthermore, I am constantly told that Wealth Management is all about growing my wealth and net worth. However, I can’t appreciate how this is quantified into figures that I can see. Nowhere are my financial goals laid down in absolute, measurable terms and neither am I able to know where I am in terms of achieving those goals.

To make matters worse, I find myself often asking if what I have been doing so far in terms of investing, has put me on the right track or otherwise?

Truthfully, there is no point in continuously presenting me with more and more investment options if I cannot tell whether I’m on track to achieve my financial goals.


Wealth Manager 4:

The financial advisory process should ideally take precedence over any sales. After all, we have been trained to analyse customers’ financial positions, measure their net worth and so forth.

However, while it is beneficial to the customer, the business objective of my bank’s wealth management division does not always support dispensing financial advice. Rather, it is distributing financial products fast and efficiently and this is reflected in our remuneration scheme where our KPI and corresponding bonus or sales commissions are measured by product sales, not by the time we spend advising our customers.  

Chances are, if a customer is keen on investing in a certain product from the get go, we would tend to bypass the advisory part and proceed to lock in the sale.


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I believe these underlying issues with the current wealth management delivery process is just the tip of the iceberg. From the outside looking in, it’s a zero sum game. The client wants tailor-made advice and recommendations which help him grow money effectively. Instead, they are peppered with endless investment proposals that are unable to cater for their unique financial circumstances. And while the wealth managers have the genuine desire to put advisory skills into practice, business objectives does pose a stumbling block to this end.

There is an urgent need to find a solution to close the gap between what is expected and what is delivered. One which makes it a win-win situation for all. But in order to do this, we have to first reimagine the entire concept of wealth management itself.

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