Licensed Financial Planner vs Financial Adviser Representative

Updated on 5th July 2021

As a normal citizen, I believe we see no difference between a Licensed Financial Planner* or a Financial Adviser Representative* because the public has interpreted the titles as any normal servicing agent representing an agency or a financial institution.

I must agree that the agency’s business model has been in the market for quite some time and at the point of writing this article, it is still monopolizing the market share compared to the professional career like the Licensed Financial Planner*. Therefore, it is a norm for us to receive responses as such, when in fact these professional career has been in Malaysia for more than a decade long. (Licensed Financial Planner since 2007Financial Adviser Representative since 2005)

If you google the word “licensed financial planner*” or “financial adviser representative*”, there are already tons of articles written by other financial bloggers, including official sites of these respective professional bodies too have posted information on this role on their websites.

But…

Not much information reflects the real difference between the two titles and if you are coming from the financial industry, you will notice selective articles are written with a personal agenda in mind and since I am still a student at work at the point of writing this, I can say I have the privilege to dissect the core difference in a transparent manner.

Below is not the full set of info that differentiates the two roles but what I wanted to point out to you is the one written in blue. Please be mindful, I do not have an intention to belittle any roles. I just wanted to point out the main difference. That is all. Period.

Area of ConductLicensed Financial PlannerFinancial Adviser Representative
License Issuance By Security Commission Malaysia Under Schedule 2, Part 2 of the Capital Markets & Services Act 2007Central Bank of Malaysia under the Insurance Act
ScopeAnalyzing the financial circumstances of another person and providing a plan to meet that other person’s financial needs and objectives.Insurance Products and may provide advice and market other financial products subject to prior approval from the relevant authorities.
#Minimum RequirementPassed all modules from CERTIFIED FINANCIAL PLANNER®/ IFP/ RFP/ Shariah RFP with at least 3 years of experience.Passed Module 1, 2, and 3 from any of the course: CERTIFIED FINANCIAL PLANNER®/ IFP/ RFP/ Shariah RFP
Charge FeeAllowableNot Allowable

As you can see, the minimum requirement to apply for the respective role is very clear. However, having partially passed modules from each respective certification doesn’t mean they are less competent. It only means they have a limitation of what they can offer to their client and they are NOT allowed to charge a fee until they have fully passed the whole certification and upgrade their status to a Licensed Financial Planner.

On the matter of fees chargeable, I will be discussing it at another time, meanwhile, in my next article, I will be sharing the differences of each certification in general so you will get an idea of what we learned.

If you find this article could benefit your family or friends, please share it around.

If you have comments about this article or suggestions on future topics, please do drop me an email at askshaneho [at] gmail [dot] com.

*Note:
The title financial planner and financial adviser is a regulated profession by the Securities Commission Malaysia and Central Bank of Malaysia respectively.

#NoteFAR Program, information as of 3 Dec 2019. The full name for the respective course are:

CFPCERT TMCertified Financial PlannerCertification is issued by the Financial Planning Association of Malaysia (FPAM)
IFPIslamic Financial Planner
RFPRegistered Financial PlannerCertification is issued by the Malaysian Financial Planning Council (MFPC)
Shariah RFPShariah Registered Financial Planner

6 thoughts on “Licensed Financial Planner vs Financial Adviser Representative”

  1. Hi Shane, thank you very much for you article. It’s very helpful.
    Though, I have 2 questions after reading through this:
    1. For the RFP certification, the minimum requirement of 3 years of full-time working experience, is there a specific timeline requirement to that? As in, if I’ve worked for a bank and insurance company for 6 years in total but that was like 5 years ago (as in between 2010-2016), would it still be valid.
    2. I understand that completing the RFP certification doesn’t guarantee that you’ll be granted the FAR License. If my final intention is to obtain the FAR license, what is the application pre-requisite with BNM?

    1. Hi Irene,

      Thank you for reading my article. Thank you also for your two questions.

      It is just my opinion, and I am not sure if things had changed since then.

      Q1: There is no specific timeline. As long as you can prove you have achieved the minimum years in the financial industry.

      Q2: Yes, getting the RFP or CERTIFIED FINANCIAL PLANNER® title will not guarantee us to be licensed as FAR.

      To be a FAR, we need to be full-time (not employed in any company), with no legal issue and no bankruptcy issue. It is the only thing I remembered. As for the rest, I suggest that you check with the financial planning firm that you intend to join.

      Another suggestion, please talk to a few firms to understand their culture and the cost involved when you partner with them as a FAR. All the best, stay safe, stay healthy! =)

  2. Hi Shane, I need some advice from you as I’m planning to enhance my professional skills but I’m not sure whether to take RFP or CFP. I’m a degree holder and finance major, hv 4 years of experience in insurance industry, I noted that RFP is a financial Adviser representative and and CFP is a licensed financial planner and it’s recognized globally whereas RFP is recognized in Malaysia only.
    So is it possible to get both? To go on with RFP 1st and then CFP, like that will it be more time & cost saving ? As what I know that RFP only cost around RM2K and CFP is around RM10K, will there be any exemptions for CFP if one has the RFP qualification?
    Please advise me which to choose..

    1. Hi Tannia,

      Thanks for your questions.

      To clear the confusion, both RFP and CERTIFIED FINANCIAL PLANNER® Certification can equally help you get to be Licensed as a Licensed Financial Planner in Malaysia through the Securities Commissions Malaysia (SC).

      I am not sure what do you mean by when you have 4 years of experience in the insurance industry means, is it as an agent or as an employee?

      In Malaysia, we have 2 licensing systems, one for the Financial Adviser Representatives (FARs) issued by Bank Negara Malaysia, and the other one is Licensed Financial Planner by SC.

      It is possible to have both RFP and CFP. But to be practical, you don’t need to have both to be licensed. Either one will do. However, if you see yourself going overseas shortly, getting the CERTIFIED FINANCIAL PLANNER® Certification will make more sense. For example, practicing as a licensed financial planner in other countries.

      If you like to have both titles at the back of your name, like “Tannia, RFP, CERTIFIED FINANCIAL PLANNER® Professional” pick one and the other one can be achieved by doing the challenge status paper. Both RFP and CERTIFIED FINANCIAL PLANNER® Certification have such options. The challenge status paper, meaning you just seat for one paper and if you passed, you can get the other title directly.

      Nowadays, both RFP and CERTIFIED FINANCIAL PLANNER® Certification cost almost the same (plus-minus). You just need to visit a few education providers to check on the pricing structure cause many started to offer online classes too and the pricing is quite competitive.

      I hope I addressed your concerns.

      Stay safe, stay healthy.

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