Category: business

Kuala Lumpur, 25 October 2024 — Manulife Investment Management globally released its
Financial Resilience and Longevity Report. Findings in Asia, which includes Mainland China, Hong
Kong, Japan, Singapore, Malaysia, Indonesia, Philippines, and Vietnam, revealed that consumers
across the region continue to face financial challenges, despite some markets and demographics
faring better than others. More than two-thirds of people in Asia are confident they will be able to
achieve their top financial goal, which varies across markets and includes having enough saved for
emergencies, managing or maintaining their current lifestyle, and enjoying financial freedom or
security after retirement., but the older generations are in slightly worse shape, with those in their 50s
and 60s less likely to have that confidence than their younger cohorts.

Amid rising life expectancy across Asia, the report explored the need to enhance financial resilience
during working years, potentially allowing individuals to save more for retirement. Longevity trends are
placing pressure on traditional family support systems, healthcare, and financial stability, especially as
changing family structures leave many older adults without the multigenerational support that was
once common.

Calvin Chiu, Head of Asia Retirement, Manulife Investment Management said, “With life
expectancy rising throughout the region, it’s imperative that consumers begin planning earlier and
more comprehensively. The report sheds light on how individuals in different markets can build
financial resilience and prepare for a secure future. The retirement industry, along with governments
and employers, play a critical role in supporting an aging population and helping consumers save and
invest for their extra years of longevity.”

Financial Resilience Varies Across Asia

The report revealed that financial resilience is essential to navigating common obstacles such as
debt, healthcare costs, and emergencies. Consumers across Asia recognized the importance of
saving for retirement, yet many struggle to balance short-term financial needs with long-term goals.

On average only 39% of people across all age groups feel good about their finances today, but an
average of 52% of respondents feel the situation could improve in 10 years’ time. However, top
concerns that may affect their ability to build financial resilience include lack of or insufficient savings,
unexpected medical expenses, and lack of or reduced income.

Other key findings in the Asia region include:
• Rising healthcare costs, inflation, and economic slowdown are top concerns, with over 70% of
consumers in Japan and Singapore concerned with these external factors affecting their
ability to build financial resilience.
• Most people in Asia rely on cash savings and bank deposits (63% – 71%), more than other
financial products, to achieve their financial goals.
• Nearly two-thirds of consumers in Asia feel children are great investments who will provide for
them as they get older. This causes concern for those who do not have family to care for
them as they age, especially those closest to retirement.

Retirement Delays and Family Responsibilities

Similar to global trends, consumers in Asia expect to delay their retirement, especially as they
continue to support both children and aging parents. Changing family dynamics in Asia, including
declining birth rates and fewer multigenerational households, have added pressure to their financial
planning.

Across all age groups, an average of 62% of people in Asia are afraid they will need to postpone their
retirement because of financial responsibility for their family.

That said though, an average of 57% respondents who don’t plan to marry or have children are
concerned about growing old without a spouse or children to look after their financial and well-being
needs. To fill the potential financial gap, an average of 75% of people said they will save as much
money as possible, and only 28% said they will invest in different financial products.

Digital Engagement and Financial Planning

Consumers in Asia are increasingly interested in digital solutions and financial planning tools to help
them manage their finances. Engagement with digital platforms correlates strongly with better
financial outcomes, with those who frequently check their retirement plan or engage with financial
content online more likely to report being in good financial shape.

“Technology is playing a critical role in helping consumers in Asia better understand and manage their
financial futures. For example, in Hong Kong Manulife has piloted a robo-advisory service to
Mandatory Provident Fund (MPF) members. This service is designed to help them better understand
their retirement investment and risk profiles, and make more informed decisions about their MPF
choices,” said Chiu. “By leveraging personalized tools and data-driven insights, we aim to empower
individuals to feel more secure about their financial lives, in partnership with plan sponsors, advisors,
and third-party administrators.”

Financial Priorities and Passive Income Approaches in Asia

While pension schemes provide some level of financial support in retirement, people need to consider
the longevity and inflation factors to assess whether their pensions could last their lifetime. A way to
create a better safety net is through investments that could generate a steady stream of income even
in retirement. For example, they can consider retaining their pension accounts after reaching
retirement age and continue investing in the scheme.

For markets that have pension schemes:
• 35% in Hong Kong expect to rely on the Mandatory Provident Fund (MPF).
• 52% in Singapore expect to rely on the Central Provident Fund (CPF), a mandatory program.
• 36% in Indonesia expect to rely on the Financial Institution Pension Funds (DPLK), a
voluntary program.

Some pension scheme providers offer income funds that regularly distribute dividends, allowing
investors to receive an income every month while remaining invested in dividend-paying funds.
There are also retail funds offering monthly distributions, where investors can gradually invest in suitable
income funds before retirement based on their individual needs and risk tolerance.

Methodology

The Asia findings of the Manulife Financial Resilience and Longevity Report was from the

Manulife Asia Care Survey 2024 that was conducted in January and February 2024 via online self-
completed questionnaires in eight markets, including Mainland China, Hong Kong, Japan, Singapore,

Malaysia, Indonesia, Philippines, and Vietnam. A total of 8,400 people, evenly split between men and
women, aged 25 to 60 years old were surveyed. The 2024 Financial Resilience and Longevity Report
for Asia is available online.

KUALA LUMPUR, 15 OCTOBER 2024 – Customers can now enjoy a fully online
onboarding experience when applying for Hong Leong Investment Bank (“HLIB” or the
“Bank”) accounts and products, including for the Shariah Trading Account which allows
customers to access, buy, and trade stocks which are Shariah-compliant.

This is in line with the Bank’s commitment to making investments more accessible and
convenient for customers. By enhancing its digital investment platforms and optimizing its
onboarding processes, HLIB is taking another step forward to ensure that our investors can
start and grow their investment portfolios with ease from anywhere, at any time.

The Shariah Trading Account is designed to cater to the growing demand for Shariah-
compliant investment solutions. The comprehensive trading account enables investors to
trade in a wide range of Shariah-compliant securities on the Bank’s digital trading platforms,
including HLeBroking and HLeBroking Mobile, and is equipped with Shariah indicators for
Shariah-compliant stocks.

Lee Jim Leng, Group Managing Director of HLIB, commented, At HLIB, we are
committed to providing our customers with an end-to-end investment experience which
provides widespread access to a variety of investment options. Ensuring a fully digital
onboarding experience, especially for our Shariah Trading Account, is a testament to our
ongoing efforts to enhance our digital capabilities and build solutions around the needs of
our customers. We believe that this will provide our customers with greater convenience and
accessibility, allowing investors to start and grow their Shariah or conventional portfolios
from anywhere, at any time.”

In line with the Bank enhancing its digital investment offerings for customers, HLIB has also
announced the launch of HLeBroking Flexi Trade. Flexi Trade offers customers additional
trading limits based on cash or shares on hand, while enabling customers to enjoy attractive
brokerage rates of as low as 0.08% when trading with cash upfront. For trading limits in
excess of cash upfront, customers can also enjoy brokerage fees of 0.18% for contracts
worth RM100,000 and above, and 0.38% for contracts below RM100,000.

This flexible trading feature provides other exciting benefits, including a limit that is double
the cash pledged and up to three times the share value pledged as collateral. It also offers
customers immediate trade confirmation and online settlement, while providing
complimentary access to HLIB’s industry-leading trading tools and market research.

Online onboarding for the Shariah Trading Account and HLeBroking Flexi Trade are now
available to all HLIB customers.

KUALA LUMPUR, 1 October 2024: A new report highlights the need for finance professionals to champion  living wages as a key factor in reducing inequality, advancing human rights, and promoting sustainability.  Produced by ACCA, Shift, and Forvis Mazars, the report also reinforces findings that paying a living wage  not only boosts productivity and reduces staff turnover but also enhances economic stability. 

The report, ‘A living wage – Crucial for sustainability’, urges finance and accountancy professionals to  address wage inequality and play a pivotal role in driving sustainable business practices. It stresses that  without prompt intervention, wage disparities will continue to undermine economic and social systems  globally, including in the Asia-Pacific (APAC) region. 

Using the insights from over 1,000 survey respondents across 93 countries and discussions with more  than 50 finance and business professionals, the report provides compelling evidence for the socio economic multiplier effect of living wages. It finds that paying a living wage benefits not only workers but  also employers, economies, and governments.  

Paying workers below a living wage is inconsistent with preserving and enhancing the value of human  capital. Business and investor initiatives involving leaders from across all regions are increasingly  highlighting the importance of paying living wages to reduce inequalities and the related risks to societies,  economies and financial systems. Yet only 33% of Malaysia-based respondents felt that it was a  responsibility which extended to their first-tier suppliers and even less beyond this. 

The report highlights the undeniable link between living wages and sustainability, with 87% of Malaysia based survey respondents recognising this connection. Living wages reduce inequality, boost economic  stability, enhance business resilience, support human rights, strengthen supply chains, and meet growing  regulatory and investor demands for socially responsible practices. 

Helen Brand OBE, Chief Executive of ACCA, stated: “Accountancy and finance professionals are held  to the highest ethical standards. The right of all employees and contractors to a living wage is an ethical  responsibility and as a result finance professionals have a unique role and opportunity to drive it as a core  part of their sustainability activities.” 

Caroline Rees, President and Co-founder of Shift, emphasised: “A living wage is a fundamental human  right. Organisations’ responsibility under international standards to respect human rights means paying  workers in their own organisation adequately, and using their purchasing practices and business  relationships to advance living wages also for workers in their value chains. Change doesn’t happen  overnight, but chief financial officers can and should drive demonstrable progress on this crucial issue.” 

Richard Karmel, Managing Partner – London, Forvis Mazars, added: “Organisations face significant  transitions as their business models seek to become more sustainable. The inability to pay a living wage  throughout a value chain, including in one’s own organisation, can only bring into question whether that  business model is sustainable. Now is the time to critically appraise the viability of these business models  and to make tough choices with a human capital focus.”

A Malaysian Perspective 

In Malaysia, addressing wage disparities is particularly critical, given the country’s commitment to reducing  inequality as envisioned in the Ekonomi Madani framework, which aims to elevate the dignity and status of  the nation with two main focuses: restructuring the economy to make Malaysia a leader in Asian economies  to ensure that the enlarged wealth is benefitted equitably by the Rakyat. By advocating for living wages,  finance professionals in Malaysia can help align business practices with national development goals. 

The report urges finance professionals across to elevate living wages to board-level discussions, integrate  them into sustainability strategies, and lead by example in their value chains, starting with Tier 1 suppliers. Regulatory frameworks like the European Sustainability Reporting Standards (ESRS) and the Corporate  Sustainability Due Diligence Directive (CSDDD) are increasingly emphasising living wages. Finance  professionals in the APAC region, including Malaysia, must prepare to meet these growing demands for  socially responsible practices, ensuring their organisations are well-positioned for future regulatory  requirements. 

Full report can be read online here: https://stories.accaglobal.com/living-wage/index.html

By Annie Wong

 

Starting 2 January 2022, even zero-income full-time students in Malaysia are required to file their tax returns with the Inland Revenue Board of Malaysia (IRBM). The question arises: How many of us are still unaware of these changes?

 

In the ever-evolving economic landscape, staying informed about recent changes that impact our financial lives is crucial. Within this dynamic field of taxation, subject to constant change, it is essential to equip ourselves with effective tax planning strategies.

 

Despite being Malaysian citizens, not everyone is aware of their tax obligations. For instance, according to Act 833¹, Finance Act 2021, a new section 66A (1)(c) mandates that any citizen aged eighteen and above must have a Tax Identification Number (TIN).

 

As of 1 January 2022, even if Malaysians are 18 years old with no income, they are required to report ‘0’ in their BE form. While 7.8 million TINs were automatically generated for eligible citizens, many still believe that being a full-time student with no income exempts them from filing tax returns.

 

During the Tax Forum 2023, Abang Ehsan Abang Abu Bakar from the Tax Compliance Department of LHDN suggested that eligible citizens, especially new taxpayers, should complete their tax return filing before 31 May 2024. The IRBM has introduced a Special Voluntary Disclosure Programme 2.0 from 6 June 2023 to 3 May 2024, allowing new taxpayers to file tax returns for YA 2022 and earlier without penalties.

 

Consider a working adult earning less than RM30,000. Should they fill out a tax filing? Yes, they should. While it wasn’t necessary previously due to their chargeable income being non-taxable, the amendment, effective 1 January 2022 mandates all citizens aged 18 and older to report and submit their tax filings.

 

Why does a full-time student with no income need to report now? IRBM cannot distinguish between zero earnings and substantial income unless it is reported. According to an EY report in November 2022², Malaysia’s shadow economy accounted for 18% of GDP in 2019, approximately RM250 billion. The shadow economy comprises underreported business income, non-registered businesses and illicit activities. Deputy Finance Minister Ahmad Maslan mentioned in an interview on 17 October 2023, that TIN and e-invoicing are expected to shrink Malaysia’s shadow economy. Now we understand; it is part of the government’s strategy to tackle the shadow economy!

 

Strategic Tax-Saving Tips

To legally save on taxes, engaging in proper tax planning at the beginning of the year is essential. One key strategy involves maximising deductions through available tax relief, charitable contributions and tax-exempt investments. Here are some tips categorised into four groups:

 

General Tax Relief: According to the Budget 2024 proposal, several beneficial tax reliefs have been added. For instance, expenses incurred for dental and medical check-ups for yourself, your spouse, parents and children are claimable up to RM1,000. Participating in up-skilling courses and retaining the receipt from the organiser can result in a claim of up to RM2,500. Contributions to the Private Retirement Scheme (PRS) offer tax relief up to RM3,000 until YA 2025.

 

Additionally, optimising the use of tax-advantaged accounts, such as the Employees Provident Fund (EPF), is crucial. The voluntary contribution initiative of EPF, i-Saraan³, allows self-employed members and gig economy employees to contribute up to RM100,000 per annum, with a special incentive of 15% for the total contribution, up to a maximum of RM500 for the current year. Combining approved scheme contribution relief and voluntary contribution/life insurance relief can result in a maximum tax relief of RM7,000.

 

Employee Perquisites: Employees working for a business entity can negotiate a better remuneration package with allowances, benefits-in-kind and perquisites. For example, Joshua, a general manager with over 15 years of experience in a pharmaceutical company, proposed to his boss a daily meal allowance and a travel allowance of RM6,000 per annum, respectively. All these allowances are tax-exempted perquisites, and Joshua doesn’t need to pay a single cent in tax for these benefits. Additionally, Joshua requested a company car.

 

Let’s assume the company provides him with a car valued at RM180,000⁴; his additional taxable income is only RM8,800. After deducting all personal tax reliefs, if Joshua’s tax bracket is 25%, he only needs to pay RM2,200 (RM 8,800 x 25%) per year to enjoy a luxury car with a driver every day. A long-service award is given by the company, and the first RM2,000 is tax-exempted as well. So, if you are a long-service employee, why not consider requesting a substantial award from the company?

 

Benefits for Married Employees: Employees who are married with children can explore opportunities for additional benefits. Children’s allowance perquisites were raised from RM2,400 to RM3,000 during the Budget 2024 proposal. Parents with children under 6 years old can claim up to RM3,000 per household by sending them to a JKM-registered kindergarten. Saving RM8,000 into Skim Simpanan Pendidikan Nasional (SSPN) is eligible for each parent until YA 2024.

 

Business Owners (LLP or Sdn Bhd): Business owners, particularly those in the Small and Medium Enterprise category, can strategically repackage remuneration to maximise tax savings. Declaring dividends instead of drawing a high salary package or director fees can be a tax-efficient move, especially to keep the total annual chargeable income below RM 100,000 and benefit from lower tax brackets ranging from 15% to 24%.

 

These are some practical tips for optimising individual tax returns in 2024. Additionally, starting on 1 August 2024, the government will implement e-invoicing for companies with revenue exceeding RM100 million. This change is set to be a game-changer in the tax landscape. Moreover, it will become mandatory for all taxpayers, including SMEs, from 1 July 2025.

 

To learn more strategies for optimising tax returns, minimising liabilities and strategically timing financial transactions, proper tax planning is required. By understanding the taxation framework, one can take control of their financial destiny by making informed choices that align with their long-term goals. May this year be a great and prosperous one for most of us!

 

About the Writer

 

Annie Wong is a dedicated and accomplished trainer with over a decade of experience in training and SME business consulting. She holds a Bachelor of Science degree from Campbell University, graduating with Summa cum laude honours. Presently, Annie is globally recognised as a Certified Financial Planner (CFP CERT TM Professional) and a Certified Professional Trainer (CPT, IPMA, UK). She is licenced as a CMSRL Financial Planner by the Securities Commission Malaysia, and her expertise has positively impacted numerous individuals and businesses.

 

Sources

(1) Act 833, Financial Act 2021.

(2) Shadow Economy: www.freemalaysiatoday.com/category/highlight/2023/10/17/governments-grand-plan-to-tackle-shadow-economyClick here to enter text.

(3) i-saraan: www.kwsp.gov.my/en/member/contribution/i-saraan

(4) Benefits-in-kind: http://lampiran1.hasil.gov.my/pdf/pdfam/PR_11_2019.pdf

By Kevin Neoh

Have you ever wondered if money were a person? What kind of relationship would you have with this ‘person’? Will this be a person who gives you a lot of stress each time you think about them or one with whom you enjoy having a quality and mutually beneficial relationship?

Why Your Relationship with Money Matters

Like many other things, such as our car, house or devices, money is also a tool that we use to help us accomplish specific goals or meet various needs. Other than being a tool we use to buy things, it is also a reflection of your values, beliefs and emotions. How you think and feel about money can affect your financial health, your happiness, and your wellbeing. That is why it is important to have a good relationship with money, one that is based on awareness, understanding and empowerment.

How Your Beliefs Shape Your Behaviour

“We begin learning about money indirectly from a young age, observing how adults handle or act around money, starting as young as three years old.”

Our relationship with money is influenced by our beliefs, which are formed through our past experiences, culture, family and personality. We begin learning about money indirectly from a young age, observing how adults handle or act around money, starting as young as three years old.

Our beliefs can be supportive or non-supportive, conscious or unconscious, rational or irrational. The truth is that they can either help us or hinder us from achieving our goals.

For example, if you grow up in a family where money is often a scarce resource, you might develop a focus on saving money and have difficulty spending, even though, as an adult, your situation allows you to live comfortably. Likewise, another person who had a similar childhood might grow up believing that there will always be insufficient money and one should spend while it’s there, or that because one is deprived of many things growing up, one should enjoy them whenever they can. Similar experiences may have produced an opposite belief and thus, different behaviours around money.

This is why our beliefs about money can shape our financial health. For instance, if a person grew up constantly believing that money is bad, that it causes pain, and that it leads to arguments in the family rooted in money issues, this person may feel uneasy having money and thus will find ways to spend it without consciously wanting to. As a result, this person will hardly have savings, may have debts and may be unable to plan their future with confidence.

As another example, a person who witnessed their loved ones lose most of their wealth due to a stock market crisis might grow up thinking that investing in the stock market is too risky, to the point that one might lose everything. Hence, this person might stay away from investing in the stock market without consciously realising why.

It is worth noting that there are no right or wrong beliefs; they are all part of us. Our beliefs are what help keep us comfortable and safe. However, as our circumstances, economy and way of life change, certain things that used to be true or worked in the past may no longer be the same. Therefore, it is sometimes worthwhile for us to examine our beliefs and discuss them with someone who can be impartial.

How to Examine and Change Your Beliefs

The first step in improving our relationship with money is becoming aware of our beliefs and understanding how they influence our behaviours. This awareness can be achieved by paying attention to our thoughts, feelings and actions when dealing with money.

You can also ask yourself questions, such as:
• What did I learn about money from my parents, friends or society?
• What are the benefits and drawbacks of my beliefs?
• How do they align with my values and goals? In what ways may they limit me?

The second step is to challenge and change your beliefs if they are limiting or harmful. This can be done by seeking evidence that contradicts your beliefs, finding alternative explanations or adopting new perspectives. Additionally, you can use affirmations, visualisation or meditation to reinforce positive beliefs.

Relationship with Money & Financial Health

When we have a better relationship with money, we can make more informed financial decisions, placing us in a position to thrive and flourish. This involves being able to cope with financial stress and work towards achieving our financial goals.

As we strive to improve our financial health, it’s essential to be mindful that what society or conventional thought considers financially healthy may not be an ideal benchmark.

Having a substantial amount of money in the bank or earning a high income does not necessarily equate to good financial health. For instance, a person with a high income, lacking an understanding of their money beliefs, and harbouring a non-supportive relationship with money may struggle to retain their income, ending up with significant debts.

Similarly, someone with a high net worth due to reluctance to spend may miss opportunities to leverage their wealth for an ideal and fulfilling life.

TL; DR

If you feel that this article is not something you expected, that’s because it isn’t. In fact, the message I am trying to convey to the reader here is that instead of focusing on growing our wealth, finding the next-best-investment or buying the latest financial product, our focus should shift from a product-oriented to a human-oriented approach. We should give considerable thought to nurturing good financial health.

Traditional financial advice or practices like budgeting, paying yourself first, investing regularly and spending within your means can help nurture our financial health. We may also benefit from seeking financial education and advice whenever needed. However, if we have not spent some time understanding the relationship we have with money and the beliefs that drive this relationship, all the hard work and efforts we put in might not matter much for our wellbeing in the long run.

Remember, money is not an end but a means to an end. Money is a tool to serve your needs, not the other way around. Therefore, this is why it makes sense for us to begin by asking, “What kind of relationship do we have here?”

ABOUT THE WRITER

Kevin is the Head of Financial Planning at VKA Wealth Planners. As a Certified Financial Planner (CFP) and Certified Financial Coach (CeFC), Kevin works with clients to transform their relationship with money, empowering them to take charge of their lives and live the best life they desire. Kevin can be reached at kevinneoh@vka.com.my.