Financial Licence & Certifications: Whom Should I Trust?

Hi Moduers,

 

Most of you might be asking about license and certifications for a financial planner. Especially with the recent case that just went viral these days. So, let’s read this article!

 

Talking about the financial industry, there are 3 main roles in Wealth Management:

 

  1. Education
  2. Advisory
  3. Transaction

 

Each of those roles has its own function and regulations, so let’s dive in:

  1. EDUCATIONThis role plays a big part in educating Indonesian people to increase their financial literacy. As we know, based on data from the Financial Services Authority (OJK) at the end of 2019, out of the 270 million people of Indonesia, only around 1% of them were capital market investors.Thanks to technology development and the rapid growth of social media, there has been growth in financial literacy. Many influencers are continuously sharing information about finance. The Communities, especially from Generation Z and Millennials, are becoming more and more literate about the importance of investing from an early age and about financial instruments.It is important for Moduers to sort out the information provided, making sure to only accept information from credible sources. Experiences and background from certain influencers can be the measurement of competency.Certifications can also be a factor to judge one’s competence, that is generally held by people who are active in this field include CFP (Certified Financial Planner), RFP (Registered Financial Planner), RFC (Registered Financial Consultant), CWM (Certified Wealth Manager), and CWMA (Certified Wealth Manager’s Association) which are generally international certifications.To get a certification, one must pass the examination on certain standards. After being granted, certification holders must also comply with the Code of Ethics and Standards of Practices that have been set. For example, in the CFP (Certified Financial Planner) and RFP (Registered Financial Planner), there are 8 Codes of Ethics which must be followed by certification holders.

    As a Wealth Management Platform with a mission to be a gateway to wealth by providing access to affordable financial instruments, Moduit certainly conducts activities to provide financial literacy, through online and offline. We utilize our social media channels such as Instagram, YouTube and also virtual seminars. We’re also doing offline activation by visiting campuses, communities and offices (Of course this was done before the pandemic season), carried out by our team who, by average, had more than 10 years of experiences in the Wealth Management Industry and also had certification, in this case, CFP.

 

  1. ADVISORYThis role is to give advisory services to clients, according to his/her risk profile and financial goals. In this role, a license from the regulator is needed, in this case from the OJK (Financial Services Authority) as Investment Advisor.In Indonesia, there are currently around 30 companies and individuals who hold Investment Advisory licenses. The list of licensees can be viewed on the Financial Services Authority (OJK) website. At the moment, Moduit already has a license as an Investment Adviser (KEP-30/D.04/2019), this license allows us in providing product recommendations for Moduers on the Moduit Navigator feature which can be found in the app. This is certainly beneficial for Moduers in determining the portfolio that fits his/her profile.

 

  1. TRANSACTION

    To execute a transaction, he/she is required to have a license from the FSA related to the product being marketed. For Life Insurance Marketers, AAJI (Indonesian Life Insurance Association) licenses are required. For Mutual Fund Marketers, they must have WAPERD Licenses (Representative of Mutual Fund Selling Agent). For marketers of securities products, WPPE (Securities Broker Representative) licenses are required. For Mutual Fund products, marketers who are WAPERD certified must become a part of an institution that has an APERD (Mutual Fund Selling Agent) license. Moduit in conducting mutual fund marketing activities already has an APERD license (KEP-16/PM.21/2018). Marketers who want to join as Moduit Advisor, are also required to owned and registered their WAPERD licenses exclusively in Moduit.

 

Besides those 3 roles discussed above, there is another role related to this, which is to manage the people’s funds. This role is shared by Fund Managers providing Mutual Fund products, of which there are currently 16 Fund Managers with approximately 70 Mutual Fund products that Moduers can choose from in the Moduit app.

 

To establish a Fund Manager, a permit and license are required from the OJK, while for those who manage an Investment Fund they are also required to have an individual license namely the Deputy Investment Manager (WMI). To find out whether a Fund Manager has a license or not, you can check it in the prospectus of the mutual fund product that you have chosen. Moduit has done the Product Curation processes to ensure that all those Fund Managers and Mutual Fund Products which are available on the Moduit app, has licenses and are the best choices for Moduers.

 

Turns out that there are a lot of certifications and licenses that must be owned by the practitioners! Even so, it’s good for you to know and understand these things, especially for when you just starting out to choose a trusted financial partner.

 

So how was it? Hopefully, with this article, it will put more peace of mind for you to start or keep the habit of investing. We always try to make Moduers, as our clients, to feel safe and comfortable in investing. For those who want to know more about investments, especially mutual funds, check out this link:

 

 

#ModuitGreetings

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