Citibank: Education on financial planning vital

  • Business
  • Friday, 14 Feb 2003


MALAYSIANS need to realise the importance of being literate and having a rational approach to financial planning as they need to strategise and plan to make their money grow, according to Citibank Bhd vice-president (investment and insurance) Charles Sik.  

“It is even riskier if investors do not understand the risks and returns of their investments. They must know the financial goal they want to achieve and their investments must be congruent with these goals,” Sik said in an interview with Starbiz

Sik said time was an important factor in investment and the earlier a person started to save the better. He added that retirement planning and children’s education were the two main things Malaysians were most concerned about.  

Charles Sik

A recent financial planning survey involving about 600 respondents from Petaling Jaya and Kuala Lumpur with monthly incomes from RM2,000 conducted by the bank and Universiti Malaya found that 35% of the respondents intended to retire at 55-56 years of age while 37% planned to do so at a later age. As for education, 32% preferred to send their children for twinning programmes with foreign universities while 21% preferred overseas education. 

This raises the question of how much is needed and where the fund will be sourced. Most of the respondents cited more than one source of funds with 67% pointing towards savings, 38% to EPF, 47% to scholarships and 40% to study loans. 

Sik said part of the reason why the general public was so conservative when it came to investing their money was the insufficient financial education they had received.  

Only 43% of the respondents said they knew enough about managing their own finances and 73% were on the low- and medium-risk platform. 

The survey also indicated that the general public was not saving early enough – 58% of the respondents started saving only when they were 40 years old and above.  

However, the survey findings also showed that 80% of the respondents were comfortable with financial planning and were prepared to seek financial advice. 

Sik said the public needed to identify their financial goals, educate themselves and shop around to find financial planners with good standards of quality and sufficient expertise support. 

He said Citibank's investment services advisors would be able to help evaluate a customer’s inherent risk via a risk profile questionnaire and using the bank’s Financial Needs Analysis software to identify and understand the customer’s financial goals. 

“We will also provide the customer with a personal financial planner and help develop an investment plan to support the customer’s goals,” he said, adding that the plan would be reviewed regularly with advisory research support from affiliated research house Salomon Smith Barney. 

Sik said it was easy to find successful investments in a bull market but as markets were now volatile due to many uncertainties, the situation was now very challenging. 

He added that with the survey Citibank would be in a better position to tailor its services and products to match what the public was looking for.  

As most of the products offered by its investment division are unit trust products and based on estimated growth for the unit trust industry (private funds), he is confident that the bank’s unit trust sales would grow by about 50% this year.  

On the outlook for the unit trust industry, Sik said the markets were very uncertain now with the threat of the US-Iraqi war and Asia was looking towards Japan to fix its economic malaise.  

“I believe once the threat of war is over, the market direction would be clearer,” he added. 

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