CORPORATE ADVISERS: (From left) Photo of Lee, Hel and Michael Hii from SFP Sarawak. Lee and Hii are currently the only two Corporate Unit Trust Advisers (CUTA) representatives in Sarawak.
KUCHING: The financial services industry in Malaysia is gearing up for a game changer with the introduction of the wrap account by iFAST Capital Sdn Bhd (iFAST).
A wrap account is a service that puts together all investments into a single account, allowing for unit trust funds in multiple fund houses.
Its use has grown rapidly in various developed countries such as the US, Australia, the UK, Hong Kong and Singapore whereby most investments are being conducted through wrap accounts.
Clients are only able to access the wrap account facilities through a licensed financial advisor company like Standard Financial Planner Sdn Bhd (SFP) in Sarawak. Currently, iFAST Capital is the first to offer this facility in Malaysia.
“The industry is here but has not seen much evolution,” highlighted Lee Khee Chuan of SFP in an interview with The Borneo Post.
“To me, I believe it started to grow in 2005 when the Securities Commission allowed the fund houses to invest overseas as well as introduce their funds that they invested overseas.
“We saw a boom at that time,” he recalled. “We see everyone rushing in to offer all kinds of funds. Up to today, the situation is such that investors are given many choices. In that situation, investors will find it difficult to find a fund house that suits all their needs.”
iFAST began in 2008 with only 10 fund houses and less than 80 funds. For the past two years, the group’s product range has increased to more than 180 funds from 18 fund houses in the platform with the most recent tie-ups with Manulife Unit Trusts Bhd, OSK-UOB Islamic Fund Management Bhd and CIMB-Principal Asset Management.
“Investments into various fund houses is possible through the existing distribution method,” highlighted iFAST senior account manager Hel Ching Ee in an interview with The Borneo Post. “However, it is cumbersome as clients need to engage the assistance from multiple agents to successfully invest into each fund.
“With the presence of a wrap account, it saves the hassle as clients are now able to tap into funds from various fund houses through a single Licensed Financial Planner.”
Another reason to opt for the wrap account, she added, was that investors would be able to enjoy free unlimited switching services.
“Free switching is not only applicable for switching within a fund house, but also between different fund houses. Compared to traditional industry practice, switching of funds are usually done at a charge,” she noted.
“Unlimited switching allows financial advisers to rebalance the clients’ portfolios such as adjusting clients’ investment objectives accordingly without incurring additional costs.”
Another major advantage is the ease of accessibility for clients to all of their unit trust investments through a single portal thanks to advancement in Internet technology. Account holders would be given their own login ID and passwords in order to login and monitor their portfolio.
“With consolidation services made easier, clients will be able to actively track their portfolio at anytime, anywhere regardless of their location,” Hel advocated.
Internet transactions such as buying, selling and switching can be conducted conveniently online. Thus, with a wireless and paperless transaction environment, advisers can now serve clients better and bring their business anywhere in the world.
The iFAST Group is one of the fastest growing financial services companies in the region with presence in Singapore, Malaysia, Hong Kong and India, managing about S$3.6 billion of assets under administration (AUA) regionally as at the end of 2011.
iFAST is a subsidiary of iFAST-OSK Sdn Bhd and was officially launched in Malaysia back in 2008 as a unit trust platform to serve financial advisers managing only RM1 million of AUA during its first year.
Since then, the group has shown tremendous growth as shown in its current AUA of RM124 million as at the end of 2011.