August 4, 2017 0

Questions that I received throughout my journey as a Financial Consultant.

Questions that I received throughout my journey as a Financial Consultant.

Throughout my journey as a Financial Consultant, I was asked few questions particularly on the topic of investing in Unit Trusts. I decided to put a list on questions I received and the answers I given.

Note: The followings answers are applicable to Malaysia’s Unit Trust Investment industry


Q1. How do I start investing in Unit Trust?

A1. Briefly, these are the steps to start investing in Unit Trust.

  • – IDENTIFY and SET your OBJECTIVES. Know your WHYS.
  • – Set your TARGET RETURN and TIME HORIZON (how long do you want to invest). For example, I want to achieve 8% in 5 years time.
  • – Make a DECISION to invest via agents or manage your own. If you need assistance from an agent, you may choose to open an account via agents that are representing only one FUND HOUSE (which we normally refer as Direct Agents) OR via agents that can access more than one FUND HOUSES (which we normally refer as Single License Investment Agents or One Stop Centre agents). Both agent types have their own advantages. Please check first whether the agent is licensed to introduce Unit Trust investment products or not. You can do that by asking for the agent’s FIMM authority card or via FIMM’s website under the ‘Is My Consultant Authorised’ section.
  • – Before investing, please go through the PROSPECTUS(ES) of the FUND(S) that you choose to invest in. Take note on the few key things relating to the FUND(S) i.e. the Fund Objective, the Fund Investment Strategy, Fees involved, risks involved, syariah-status, who is the TRUSTEE and FUND MANAGER and other important information that you can get from the PROSPECTUS(ES).
  • – Set time to REVIEW your investment(s). To REVIEW the investments once in three (3) months, once in six (6) months or once a year. Why we need to review our investment(s) from time to time? Mainly to monitor whether our investments achieve the target that we set or not. If YES or NO, we can decide on what to do after review.


Q2. What is/are the difference(s) between DIRECT AGENTS and SINGLE LICENSE INVESTMENT agents?

A2. Both AGENTS are registered with FIMM to introduce and distribute Unit Trust investment products to potential investors.

  • – DIRECT AGENTS can only introduce FUNDS from the FUND HOUSE that he/she represents.
  • – SINGLE LICENSE INVESTMENT AGENTS can introduce FUNDS from the FUND HOUSE that he/she represents as well as FUNDS from 3rd Party FUND HOUSES that has business arrangements with the FUND HOUSE that he/she represents. The FUND HOUSE that he/she represents must be registered with FIMM as an IUTA (Institutional Unit Trust Advisors) first before it is allowed to introduce and distribute funds from 3rd Party FUND HOUSES. Some banks in Malaysia are examples of an IUTA.
  • – It is true that not all FUNDS offered by 3rd Party FUND HOUSES via IUTA can be introduced by SINGLE LICENSE INVESTMENT AGENTS. These FUNDS are exclusive to DIRECT AGENTS. If you still want to access funds that you want to invest in but not available to SINGLE LICENSE INVESTMENT AGENTS, you may do so by contacting any DIRECT AGENTS that you are comfortable with.


Q3. What are some ways to compare Unit Trusts and what is the importance of doing so?

A3. I answered this on Quora (as of 4 August 2017, the answer has been viewed 125 times).

  • First, understand what are unit trust and unit trust funds. Know the objectives of each components in a unit trust investment.

    Know your financial objectives and assess your risk appetites. Know the basics and learn up the materials about unit trust investing. Unit trust funds will incur some charges when you invest – initial sales charge, annual and/or exit fees.

    There are plenty of websites that can help you with the basics of unit trust investing i.e. Investopedia, iMoney, individual Fund Houses’ websites that promote Unit Trust Investments

    Before you invest you should read the Prospectuses/Product Highlight Sheets/Fund Fact Sheets to understand each unit trust fund objectives and features. Unit trust funds are classified into different asset classes i.e. equities, bonds, money market

    How can we monitor and compare unit trust funds?

    There are plenty of monitoring tools that you can use to monitor your unit trust funds performance i.e. Lipper Web, Morningstar, Fundsupermart, eUnitTrust or via the monitoring system and/or statements given by the Fund House that you use to select and invest in the unit trust funds.

    Why we should monitor our unit trust fund investments?

    To make sure we can set a strategy for our next move to take if lets say the fund that we invest in, gains or loses above or below our desired returns benchmark – to switch, to add more or do nothing

    Please do understand that there are some strategies you can use when investing in unit trust funds. One of the common strategy that unit trust investors use is to set the time horizon for the investment from medium to long term.

    Tip: Don’t just look at short-term gains or losses of a unit trust fund. Fund Managers that manage the unit trust investments for us is also an important factor when considering a unit trust fund.

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