Zeti Akhtar Aziz: Building a progressive Islamic banking sector - charting the way forward Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Seminar on 10-Year Master Plan for Islamic Financial Services Industry, “Building a Progressive Islamic Banking Sector Charting the Way Forward”, Putrajaya, 22 June 2005. *  *  *  "The Islamic financial services industry is now at the threshold of its next stage of development. This decade has seen significant progress being achieved. Islamic finance has now gained wide acceptance as a form of financial intermediation. The sustainability of this progress, however, demands due attention to the future - to look beyond the near term, and to take a longer-term perspective into the needs of the future and to evolve an Islamic financial system that will best serve these needs. An essential part of this process is the clarity of the vision and the objectives that are to be achieved. This provides the starting point for the formulation of a Master Plan which defines the blueprint for the future development of Islamic finance. While envisioning the future will provide the strategic focus and the common goal to be achieved, of greater importance will be the actions that need to be taken to make it happen."
Several insurers and FA firms recognise the risks of associating with representatives who may be distracted by other commitments and remuneration opportunities outside the realm of financial advisory services. These companies accept only representatives who are fully dedicated and committed to providing quality financial advice to their customers. This is how it should be. But practices vary across financial institutions, and it may not be practical to ban representatives from undertaking other activities that earn an income. MAS will work with the industry to push for a consistent industry-wide approach to representatives who engage in multiple activities. Role of introducers FAIR will also review the current practice of FA firms and their representatives making use of “introducers” to reach out to customers. An introducer may be another representative, but may also be any man-on-the-street. Introducers are typically paid a fee to refer customers to financial advisers, or they get a cut of the commissions generated from sales to the customers. The use of introducers means customers risk dealing with individuals whose credentials have not been vouched for by any financial institution. It also means that customers may not receive proper advice when introducers go beyond introducing and pressure customers to buy products. Financial advisory activities in insurance broking firms Making sure that the financial advisory role is the primary focus of FA representatives is only one side of the coin. The other aspect to ensure, is that firms whose primary activity is not financial advisory services, are fully capable of managing this part of their business.