6.2 Financial Planner Credentials, Skills, Remuneration, and How a Planner Differs from a Consultant

FIMM Combined Examination FCE

Track your progress as you read

Finished sections get a check mark.

1 Introduction: The FIMM Combined Examination (FCE)

0.1 FCE Exam Facts, Registration Rules and How to Use This Guide

2 Chapter 1: Understanding Collective Investment Schemes in Malaysia

1.1 What a Collective Investment Scheme Is and How Malaysian CIS Are Classified 1.2 Investment-Linked Funds Are Not UTS; Industry Growth and History 1.3 Participants in the CIS Ecosystem: Unit Holders, Managers, Trustees, Distributors and Regulators

3 Chapter 2: Introduction to UTS and PRS

2.1 UTS and PRS as Investments: Mechanics, Unit Calculations and How They Compare 2.2 Types of Funds: By Asset Class, Fund Structure and Investment Objective 2.3 Methods of Investing and Dollar Cost Averaging 2.4 Benefits and Disadvantages of Investing in UTS and PRS 2.5 Understanding Risk and the Risks of Investing in Schemes 2.6 Shariah-Compliant Schemes, Their Risks and the Role of the Shariah Advisory Council

4 Chapter 3: Regulatory Framework

3.1 The Regulatory Framework: The SC, Other Regulators and FIMM's Dual Role 3.2 Legislation, SC Guidelines and FIMM Rules Governing UTS and PRS 3.3 Regulation of Scheme Providers and Oversight Functions 3.4 The Deed, the Prospectus or Disclosure Document, and the Product Highlights Sheet 3.5 Portfolio Constraints: Permitted Investments, Liquidity, Borrowing and Exposure Limits 3.6 Regulations for Other CIS: Real Estate Investment Trusts and Exchange-Traded Funds 3.7 Regulation and Duties of the Scheme Trustee 3.8 Regulation of Marketing and Distribution: Distributor Categories, Collection Points and Agency Structure 3.9 Registration of Consultants: Eligibility, Fit and Proper, Duration, Variation and Revocation

5 Chapter 4 (Part 1): Marketing and Distribution — Disclosure and Transactions

4.1 Servicing Investors and the Contents of the Prospectus and Disclosure Document 4.2 The Product Highlights Sheet, Advertising Standards and Account Maintenance 4.3 The Purchase Process and Suitability Assessment Before Personal Advice 4.4 Cooling-Off Rights, Repurchase of Units, Suspension and Switching 4.5 Financing the Purchase of UTS: Process, Safeguards and the Risk Disclosure Statement 4.6 EPF Transfers and Withdrawals for Investment in Approved Unit Trust Funds

6 Chapter 4 (Part 2): Marketing and Distribution — Distributions, Reporting and Service

4.7 Distributable Income, Distributions and NAV, "Buying" a Distribution and Taxation 4.8 Reporting to Investors: Confirmations, Statements, and Semi-Annual and Annual Reports 4.9 Marketing Principles, Delivering Quality Service and Handling Complaints 4.10 The Effect of Inflation, Taxation and Investment Costs on Returns 4.11 Investment Alternatives to UTS and PRS

7 Chapter 5: Code of Ethics

5.1 Compliance, Ethics and the Structure of the FIMM Code of Ethics 5.2 Core Principle 1: Honesty and Integrity 5.3 Core Principle 2: Professionalism 5.4 Core Principles 3 to 5 and Non-Compliance: Conflicts, Disclosure, Confidentiality and Misconduct

8 Chapter 6: Personal Financial Planning

6.1 Personal Financial Planning: Definition, Features, Five Areas and the Six Steps 6.2 Financial Planner Credentials, Skills, Remuneration, and How a Planner Differs from a Consultant 6.3 The Consultant's Role in Investment Planning and Advising Clients Through the Life Cycle

9 Chapter 7A: Features and Operations of UTS

7A.1 Structure of a UTS, the Trust Deed, the Parties and Modifying the Deed 7A.2 UTS Fees, Charges and Expenses, and the Management Expense Ratio 7A.3 Dealing in Units, Valuation, NAV Calculation and Unit Prices 7A.4 Forward and Historical Pricing, and the UTMC's Holding of Units 7A.5 Unit Splits, Distributions and Their Effect on NAV 7A.6 Measuring UTS Performance: Returns, Performance Tables, Risk Measures and Qualitative Factors 7A.7 Operational Aspects of Shariah-Compliant UTS and PRS and the Shariah Contracts Between the Parties 7A.8 Borrowing to Invest in UTS and the Risks of Loan Financing

10 Chapter 7B (Part 1): The Pension Landscape and the PRS Framework

7B.1 The Malaysian Pension Landscape and the Adequacy of Retirement Savings 7B.2 The World Bank's Five-Pillar Pension Framework in the Malaysian Context 7B.3 Key Players: EPF, KWAP, LTAT, Employer-Sponsored Schemes and Annuities 7B.4 Why Malaysia Needs PRS: Ageing, Longevity Risk and the Benefits of PRS 7B.5 The PRS Framework and the Private Pension Administrator (PPA) 7B.6 PRS Structure, the Trust and Deed, Advantages over Other Products, Eligibility and Contributions

11 Chapter 7B (Part 2): PRS Operations

7B.7 The PRS Default Option and Tax Incentives for Members and Employers 7B.8 The PRS Account Structure (Sub-Accounts A and B) and Vesting 7B.9 PRS Withdrawals: Pre-Retirement, Retirement, Permanent Departure, Incapacity and Death 7B.10 Switching Between Funds and Transferring Between PRS Providers (Portability) 7B.11 Unclaimed Monies, Death of a Member and PRS Nomination 7B.12 PRS Funds: Number, Core and Non-Core Funds, Objectives, Risk Profiles, Asset Classes, Authorisation and Naming 7B.13 PRS Fees, Charges and Expenses 7B.14 PRS Unit Creation, Forward Pricing, Valuation, Distributions, Performance Measurement and Electronic Communication

6.2 Financial Planner Credentials, Skills, Remuneration, and How a Planner Differs from a Consultant

Key Takeaways Explain This Topic AI

Financial planning is one of the regulated activities under the CMSA, so anyone carrying it on must meet the licensing requirements in the SC Licensing Handbook.

An individual applying for a CMSL for financial planning must be at least 21, be resident in Malaysia and have net personal assets of at least RM50,000 at all times.

The SC Licensing Handbook recognises three credential providers for financial planners: FPAM, MFPC and MFPAA, which was formerly the Malaysian Association of Chartered Financial Consultants.

A Consultant who introduces himself as a financial planner needs a CMSL or CMSRL for financial planning in addition to FIMM registration.

In 2019 the SC allowed flexibility in the fee structures of CUTAs and CPRAs, enabling mentorship models and commission sharing between senior and junior planners.

Last updated: October 2026

Financial Planning Is a Regulated Activity

Financial planning is a regulated activity listed in Schedule 2 of the CMSA, so anyone carrying it on must meet the licensing requirements in the SC Licensing Handbook .

Licence route Rule

CMSL – company Meets Chapter 4 of the Licensing Handbook: organisational competence, fit and proper directors, CEO and key staff, shareholding composition, adequate financial resources

CMSL – individual Meets Chapter 5 of the Licensing Handbook (below)
CMSRL A licensed representative may carry on financial planning if the principal is licensed for it

Sole proprietor or partnership with a CMSL Cannot have licensed representatives acting for it; in a partnership only the licensed partner may do financial planning

Requirements for an individual CMSL for financial planning

At least 21 years old.

Business registered with the Companies Commission of Malaysia , unless otherwise approved.

Net personal assets of at least RM50,000 (or foreign-currency equivalent) at all times .

Resident in Malaysia.

A readiness checklist covering manuals, IT, policies, controls and compliance; the SC may run a readiness examination.

A qualification from one of three credential providers: FPAM (Financial Planning Association of Malaysia), MFPC (Malaysian Financial Planning Council) or MFPAA (Malaysia Financial Planners and Advisers Association, formerly the Malaysian Association of Chartered Financial Consultants).

Ongoing Continuing Professional Education in the format the SC specifies.

Skills a Financial Planner Needs

Skill Why it matters
Technical skills To analyse finances and build a plan

People skills To make clients comfortable sharing full personal and financial data; a plan cannot suit a client who withholds information

Listening To pick up clues to clients' thoughts and fears in data gathering and reviews, empathise when returns disappoint, and record sessions in writing

Reading body language Clients sometimes say one thing while their body language says another

Ethics and professionalism Putting the client's interests ahead of one's own builds trust , the most valuable ingredient in the relationship

The Securities Industry Development Corporation (SIDC) , the SC's learning and development arm, introduced the Industry Competency Framework (ICF) in 2017 . Its Competency Dictionary has 61 competency titles covering 173 job roles . In 2019 SIDC launched the Capital Market Competency Management System (CMS) for assessing competencies and identifying development needs. Each chapter of FIMM's study guide is mapped to ICF competency levels.

Financial Planner vs UTS/PRS Consultant

The study guide uses two examples:

Example 1 Example 2
How "A" presents himself As a UTS or PRS Consultant As a financial planner

What "A" does Needs analysis, then recommends a UTS or PRS product Needs analysis, then recommends, among other things, a UTS or PRS product

What "A" needs Only FIMM registration as an authorised Consultant A CMSL or CMSRL for financial planning and FIMM registration

Type of planning Single-purpose planning (investments only) Can offer comprehensive planning

Comprehensive financial planning covers cash management, insurance, wealth creation, enhancement and preservation, tax, business succession, trusts and wills. FIMM's practice question: a Consultant cannot introduce himself as a financial planner unless licensed by the SC to carry on financial planning. The FIMM Code of Ethics reinforces this by prohibiting unauthorised use of the title.

How Financial Planners Are Paid

Model How it works Comment
Fee based on time Charge for the time spent building a plan Longer engagement, higher fee
Fee based on portfolio size A percentage of assets under review Larger portfolio, higher fee
Performance-based fee Linked to investment results (some US advisers) Rare

Commission Paid by product providers when a product is sold Transaction-driven; clients may question whether advice is objective

In the UK and Australia a large share of unit trust sales comes through independent financial advisers . In Malaysia, paying for a plan was once uncommon and seen as only for the wealthy, so planners were paid by commission like Consultants. Commission-only pay rewards transactions, which some argue is inappropriate when advising on goals. A service-based fee reduces the need to "sell" and is often seen as more independent and professional. Retail investors are now more willing to pay for advice.

Initiatives to Strengthen Financial Planning in Malaysia

Fee flexibility for CUTAs and CPRAs (2019) – lets firms build mentorship models and share commission between mentors and mentees, so junior planners gain practical skills under senior planners. Firms must make sure this benefits planners broadly and does not become a pyramid structure.

Marketing Representative framework – financial planners may refer clients to another capital market licence holder without registering as marketing representatives if the referral is made in the course of providing financial planning ; otherwise they must register.

Technology – planners who give holistic, proactive advice have an edge over robo-advisers, which cannot replicate human connection, but should still use technology to spread financial literacy.