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Tuesday, October 11, 2016

3 Ways to Protect Yourself From Bad Financial Advice

Throughout our lives, we often get approached by friends or family to tell us all sorts of “KangTao/Lubang”(tips). However, more often than not, the "KangTao" is usually in the best interests of themselves.

3 Ways to Protect Yourself From Bad Financial Advice Fiduciary

Unlike in the U.S, whereby the Department of Labor will be implementing the Fiduciary Rule next year, which will help to put the other’s needs before anyone else, otherwise they can get sued if they wrong them. In Malaysia, there's no such a rule yet except having "Avoid Conflict of Interest (BNM)" or "Integrity (CFP)" as one of the code of conducts and ethics. 

So how do you protect yourself? 

Here are the 3 Ways to Protect Yourself From Bad Financial Advice:

1. How Are They Being Compensated? 
Be it an introduce-r, agent or advisor, the person should put in writing all the fees and commissions he or she will be receiving from all sources. Do they get certain percentage from the money you invest? Do the products they recommend contain charges that they will receive? Part of the problem with them is that they will make you focus on your potential return and not telling you exactly how much money they make in what they’re selling you. Put everything (written form) on the table.

2. Is Their Advice Conflicted? 
They should give a “reasonable basis” for the advice they are giving you. If they recommend a product or service, you should know if they are getting a commission or other fee through the transaction. Also ask if they will receive bonus or incentive trip for making recommendation. They should always make recommendation because it’s in your best interest (which they always claim to be), not theirs.

3. Are They Qualified to Give You the Advice You Need? 
Learn from the right people, not just anyone. You need to know if they can give the advice that’s tailored to your financial situation and not like anyone else? (Others have it doesn't mean you should have it too!) Are they qualified or in the right position to give you the right financial advice? You’ll probably need to find a licensed financial advisor with CFP or RFP certification. Again, you need to know if your advisor can provide un-conflicted advice in these complicated areas.

3 Ways to Protect Yourself From Bad Financial Advice Fiduciary

Keep in mind that without the Fiduciary Rule in force in Malaysia, you’re on your own! There is no government body forcing the fiduciary rule on anyone. So in the meantime, seek out advisers who abide by the fiduciary standard. They are generally certified financial planners, chartered financial analysts, certified public accountants and licensed financial advisers.

Avoid those who are merely introduce-rs, agents, brokers, “registered representatives” or “wealth managers” who are not fiduciaries, whereby they probably not going to find you anymore after the sales. So the next time any KangTao comes up to you, remember to ask these questions to protect yourself from bad financial advice! 

Till then. ;)
In supporting of upholding ethical conducts!

Tuesday, October 4, 2016

Hire Your Finance Doctor Today!

#YourFinanceDoctor Clients:

You care about your future and you want to know where to start. You want to work with someone who you can relate to and someone who understands you. You realized the importance of financial planning and after all, it was not in the syllabus for us to learn during high school or even university. So now it's time to put it all together

Hire #YourFinanceDoctor for 1 Year!

You will receive:
  • A 50-page financial plan with a series of "To-Dos-List" 
  • Financial plan includes recommendations in all the following areas: cash flow planning, debt repayment planning, insurance planning, investment planning, retirement planning, estate planning and tax planning.
  • Recommendation of asset allocation on your EPF and PRS are included as well.
  • A recommendation of the credit card that fits your needs based on your spending.
  • Unlimited mobile phone and email support for ONE WHOLE YEAR to help you reach your financial goals even faster.
  • Quarterly meet up for monitoring and reviewing financial plan 

This is the right one if you are ready for actionable financial planning advice which can certainly help you find clarity around your money. It’s time to stop making the bad/impulsive decisions about your finances and instead talk to a CFP® who can help you get on track so you can reach multiple financial goals simultaneously.

Fees will be charged according to your annual income category.
RM200,000 and below : RM2,000
RM200,001 - RM350,000 : RM3,000
RM350,001 - RM500,000 : RM4,000
RM500,001 and above : RM5,000

This will be the first best investment you have ever made!  

If you are thinking that maybe you are not quite ready to work with #YourFinanceDoctor on an ongoing basis, but you still have a few pressing financial questions that you would like help on. What can you do?

Quick Start 1 Hour Session!

You will receive:
  • A 60-minutes face to face meeting
  • An in-depth discussion of your few pressing financial questions.
    • Popular questions:
      • Can you help me summarize my insurance policies?
      • How much is my current total investment return?
      • Can you help me with a budgeting plan?
      • How can I fully utilize my EPF?
      • What can I invest with XXX amount of money?
  • A follow-up email with recommendations and "To-Do-List" to solve your pressing issues within 24-hours so that you can take action immediately!

Friday, September 30, 2016

EPF Increases Minimum Basic Savings to RM228,000 At Age 55 (With Example!)

The Employees Provident Fund (EPF) has announced that the basic savings at age 55 will be increased from RM196,800 to RM228,000 effective Jan 1, 2017. The increment will also be made across all ages accordingly, refer to the table below. 

What is Basic Savings?
The basic savings is a pre-determined amount set according to age in Account 1 to enable members achieve a minimum savings at different age, for example, when they reach age-55, they should have at least RM228,000 to retire. The amount in excess of the Basic Savings can also be invested in products offered by appointed Fund Management Institutions approved by the Ministry of Finance.

Why Do I Need That?
The rationale for the implementation of this basic savings is to ensure that members have sufficient savings when they retire in order to support their basic retirement needs for 20 years from age 55 to 75, in line with Malaysians' life expectancy. The new quantum is benchmarked against the minimum pension for public sector employees, which has been raised from RM820 to RM950 per month from age 55 to 75. (I don't think RM950 per month is enough either!)

How Does It Affects Me?
Well, it doesn't if you did not opt to withdraw for the Members Investment Scheme (MIS). But if you do, then the withdrawal amount for MIS will be reduced

But thankfully, EPF also revises the Maximum Investment Withdrawal Percentage from the current 20% to 30%, effective Jan 1, 2017 as well. 

Any Example?
As of today (30th July 2016), RM100,000 in Account 1:
As of 1st Jan 2017, RM100,000 in Account 1:

With the increment in Minimum Basic Saving and Maximum Investment Withdrawal Percentage, members can now withdraw more money for investment. In other words, there will be more money available to be controlled by you. So if you think you can outperform EPF Dividend, then this will be a good news to you! Otherwise, it doesn't affects you at all. 

To find out more about it, feel free to contact #YourFinanceDoctor at
Don't forget to follow us on our Facebook Page too!

Earn, Save, Invest, Repeat!
Till then. Happy Investing! ;)

Monday, September 26, 2016

FAQ - How to Start Investing in Unit Trust Fund?

In my previous post regarding "Start Invest As Low As RM100!", many have come to me and ask how do they actually kick start. So I figured that perhaps I should write "How to Start Investing in Unit Trust Fund". If you are reading this now, that's great because you have the urge to kick start now, so don't let it stop and follow the 4 easy steps below! 

Prospect(s): "How to Start Investing in Unit Trust Fund?"

By now, you should be convinced on why you should start investing now, otherwise, here's a quick recap:
4 Reasons to Invest NOW:

Step 1: Choose your channel
There are a few channels that you could go through to invest in unit trust fund:
1. Institutional Unit Trust Advisor (IUTA) - Usually those in banks
2. Unit Trust Consultant (UTC) - Agent that attach to only one Principal
3. Corporate Unit Trust Advisor (CUTA) - Independent Financial Advisor
4. Online - FundSuperMart

Each has different sales charge and level of service. Check out this post, you will be able to tell the difference of UTC and CUTA. So choose the one that best suits your needs. For more info on the clarification of IUTA, CUTA, UTC and so on, check out Securities Commission Website.

Since #YourFinanceDoctor is an Independent Financial Advisor under CUTA, hence the following steps are only applicable if you have decided to choose #YourFinanceDoctor.

Step 2: Read thru FIMM Pre-Investment Form
Like I always said, knowing what you invest is utterly important! So read through as you will need to sign this form before investing in unit trust fund (that's why it's called Pre-Investment Form). No worry, #YourFinanceDoctor will explain to you again as well during the appointment.

Step 3: Fill up the form

Step 4: Voila! That's all!
Congratulations for taking the first step to your better future!

That's all for now, Happy Investing!
Coming up next, "Why your Agent does not find you anymore?" Stay tuned for the next post!
If you have any question to ask #YourFinanceDoctor, feel free to email here.

Tuesday, September 13, 2016

FAQ - Any Fund Performs Better Than 6.4%(EPF)?

Following the well response from the previous FAQ post on how #YourFinanceDoctor charges in Unit Trust Investment (read here if you haven't), I have decided to write on this first before the "Why Your Agent Does Not Find You Anymore?". So as usual, here's the question:

Prospect Teoh: "Any fund outperforms 6.4% (EPF)?"

YES OF COURSE! But first let me go through some introduction to Unit Trust. Unit trust fund may not be well known enough in Malaysia as compared to other countries due to the lack of financial literacy among Malaysians. As of 31 July 2016, statistic from Securities Commission Malaysia has shown that there are a total of 636 approved funds from 35 management companies which amounted to RM352 billion of total net asset value (21% of Bursa Malaysia Market Capitalization). 

Captured from Securities Commission Malaysia website

So the question is, are you aware that there are a total of 636 funds from 35 different management companies for you to choose from? Probably not! Most of the people #YourFinanceDoctor came across only know a few of them which are well known (company with strong marketing) such as Public Mutual and probably a few others like CIMB or RHB. Hence it is normal to jump into conclusion that unit trust doesn't perform well when you are not expose to all the available funds. 

Instead of telling you what are the Top Funds with Highest Return, here's how you can learn to fish for yourself! ;)

Step 1: Go to and Click "Fund Selector"
FYI, Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. Take note that it is important to go for independent website to get unbiased/neutral data
(Ads: Just like you should hire Independent Financial Advisor like #YourFinanceDoctor !) 

Step 2: Click "Search" to see all the available funds in Malaysia
When you are familiar with the website, you can then play around with the filters like sort the funds by categories such as fund type, base currency, local representative, investment provider and so on!

Step 3: Click on "Performance" tab and Click "10 Years Annualized(MYR,%)" to sort
Don't be overwhelmed by the long list of funds! Good thing about this website is that you can get all sort of information of the funds. So sorting by 10 Years Annualized Return will give you a list from highest to lowest. As you may see, Kenanga Growth Fund, Eastspring Investments Small-cap and Affin Hwang Select Asia (ex Jpn) Quantum are the top 3 funds. Their return? Easily more than 6.4%!

Step 4: 10 Years too long? Click 5 Years Annualized then!

Step 5: 5 Years is still too long? Click 1 Year Return then!
Upon this step, you may realized that why in short term the return could be as high as 69%?! Well the truth is anyone in the market can tell you how good they are to earn 2 or even 3 figure return in percentage. But how many of them can continuously and consistently doing that? RARE! So same goes to unit trust fund, you may required to do research on each funds. 
(Ads: That's why you pay #YourFinanceDoctor to do all the hard work!) 

But back to answer to the question, YES OF COURSE there are plenty of funds outperform 6.4%! A quick sort on 1 Year Return from Largest to Smallest, you will see that the outperforming funds stop at Affin Hwang Select AUD Income with a 1 year return of 6.43%! Take note that it is on page 9, so with 30 funds per page, that will be [(9 x 30) - 13] = 257 funds outperform 6.4%! Which means, out of 670 funds, 257 funds or equivalent to 38% of chances that you will earn more than 6.4%

And if we want to see which funds consistently outperform 6.4%, then let's sort by 10 Years Annualized Return Largest to Smallest. Again as you can see, it stops at Public Asia Ittikal with 6.43% 10 Years Annualized Return on page 5. So that will be [(5 x 30) - 14] = 136 funds outperform 6.4%! However, out of 670 funds, there are only 277 funds that are existed for more than 10 years. So that means out of 277 funds, 136 funds or 49% of chances that you will earn more than 6.4%

P/S: Do take note that funds that are approved for EPF Withdrawal for Investment will be much lesser (Please refer here for more info)

Take example of the top fund in the list of 10 Years Annualized Return, Kenanga Growth Fund. If you have invested a once-off lump sum of RM10,000 in 15th September 2006 (10 years ago), with 10 years Annualized Return of 17%, you will now have RM48,533.92! (Yes without doing anything!) 

RM10,000 -> RM48,533 (10 years in KGF)
RM10,000 -> RM14,802 (10 years in Bank FD)

Chart taken from Morningstar!

So you see, this is why, again and again, #YourFinanceDoctor would urge all of you to start investing! One question that you should always ask yourself... 

Yes you may be hardworking,
But is your money hardworking than you?
Slide taken from one of #YourFinanceDoctor talk
Do take note that all the above does not indicate any recommendation to buy. You are advised to do your research before investing into any particular funds. Otherwise, you should get a Independent Financial Advisor like #YourFinanceDoctor (Contact me here!)

Counting Money photo giphy.gif

That's all for now, Happy Investing! 
Coming up next, "Why your Agent does not find you anymore?" Stay tuned for the next post!
If you have any question to ask #YourFinanceDoctor, feel free to email here.

Wednesday, August 31, 2016

FAQ - How Do You Charge in Unit Trust Investment?

Sorry for the long hiatus as #YourFinanceDoctor was lack of time and effort in blogging, but here I am, trying another new approach of writing, by answering some of the frequently asked questions. So long story short, here's the first one:

Prospect J: "How do you charge in Unit Trust Investment?"

Unlike typical agent that you frequently came across on the street, you will be investing with #YourFinanceDoctor thru a Wrap Account. This may sounds new to you as it is not common in Malaysia yet. But let's take a look at the definition given by Investopedia

So instead of charging just a once-for-all upfront sales charge like what typical agent does, #YourFinanceDoctor would charge a much lower sales charge plus annual wrap fee. To make things simple, here's an illustration of how it works. 

Imagine if you have RM100,000 to invest and here are two options for you to choose!

Surprise surprise! The return is a lot higher even when you are investing with the same amount of money in the exact same funds at the same time and same price. Most importantly, I think the biggest advantage of #YourFinanceDoctor is to have the same objective as the client, which is to earn more for client so that we earn more thru the annual wrap fee too!

That's all for now! Happy Investing!

Coming up next, "Why your Agent does not find you anymore?" Stay tuned for the next post!
If you have any question to ask #YourFinanceDoctor, feel free to email here.

Tuesday, June 14, 2016

Financial Precautions You Should Take In An Uncertain Economy

During uncertain economic times, you can soothe your fear by taking some financial precautions to protect yourself and your money. Fear is about uncertainty. It's about not being able to predict what will happen next. This unpredictability breeds anxiety. And in the midst of uncertainty, fearless people react very differently than fearful ones do. 

So here are the financial precautions that fearless people take.

100% Principal Protection
Losing your hard earned money is horrible. The last thing you want would be having to worry that your hard earned money are all gone over the night. So during market uncertain, keeping the principal safe with no downside risk is the number one priority. 

Diversification to Worldwide
Never put all your eggs in one basket. It is common sense that you do not want to put all your money into only one investment vehicle and solely relying on it to make more money for you. That's like walking on a thin rope! Hence, diversified to all the world's major stock market indices would be the best bet during uncertain economy.   

Potential for Growth
Being safe is the bottom line, but the upside gain would be desired as well. The return of the investment should have 100% participation in the growth performance. Advanced investors usually will seek out for those company shares with what they deem good growth potential. Otherwise, you may just pick on a broader investment such as MSCI Emerging Market, S&P 500 and so on, that you think they may grow tremendously in the future.

Expose to Foreign Currency 
It has been a bumpy ride for Malaysian Ringgit, especially in the past one year. MYR per 1 USD went from 3.708 in June 2015 to as high as 4.458 in Sept 2015, and now back to 4.089 as of June 2016. So it would be wise if you are able to take advantage on investment that expose to foreign currency.

Online Accessibility
Online accessibility makes life so much faster and easier! You would want to have the control in your hand and all the information of your investment available to you at your fingertips. Be it your personal information, investment transactions and also performance, they should be all available on the internet! 

Plan ahead in case of unfortunate events. You would want to be able to nominate the beneficiaries that will receive the proceeds of your investment with hassle free, especially if one is without will or trust written. Just like your EPF or insurance policy, nomination is needed to ease the whole process of knowing who to transfer the proceeds of the investment to.

All in all, if you don't apply what you learn then learning loses most of its value. So now all you have to do is to reflect upon and take action now! Comment below if you have any ideas to contribute as well! Happy investing! 

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