Corporate Unit Trust Advisers



10th OCT 2007

With the growing awareness on the benefits of unit trust investments, it has necessitated more robust efforts on the part of the industry to reach out to the general public. Accordingly, FMUTM has decided to further expand the existing distribution channels so that the general public has better access to unit trusts to meet their investment needs. Over the past two years, FMUTM has been working very closely with the Securities Commission(SC) on the guideline allowing financial planners registered with the SC to market and distribute unit trust funds to the investing public. This new guideline is now formalised after a series of consultations between the FMUTM, the SC and the financial planning associations.

FMUTM is pleased to announce that with effect from 11 October 2007 financial planners who hold the CMS Licence (Dealing in Securities restricted to unit trust products) are eligible to apply to register with FMUTM to market and distribute unit trust funds of multiple unit trust management companies(UTMC) just like other financial institutions – banks and stockbrokers. This new group of distributor is known as “Corporate Unit Trust Advisers or CUTA” and will act as advisers for their clients.

The introduction of CUTA will herald a new age for the unit trust industry as it will add more depth and breadth to the distribution of unit trusts in this country. In the more developed countries, financial planners play an important role in assisting their clients in asset allocation and advising them on the asset classes to invest to meet their financial goals.

FMUTM believes the future trend in Malaysia will see CUTA playing a similar role just like in other developed countries. With their experience and knowledge on personal financial planning, CUTA will be able to offer the independent advice required by their clients before the latter make their investment decisions. It is also envisaged that CUTA’s primarily role as a personal financial planner to their clients will not be affected even though they are now allowed to market and distribute unit trusts products. Unlike the traditionally unit trust agents which represent one company, CUTA represents two or more UTMCs and thus are able to offer more investments choices to their clients. The latter feature of marketing and distributing unit trusts will be an additional service to the overall comprehensive advisory services offered by the financial planner.

The requirements for the registration of CUTA are among others:

  • Only a financial planning corporation registered with the SC and holds the CMS Licence (Dealing in Securities restricted to unit trust products) is eligible to be registered as CUTA with FMUTM.
  • Must have an initial paid up capital of RM 100,000.00.
  • A minimum professional indemnity of RM 200,000.00 per claim coverage to protect investors in cases of professional negligence.
  • Must represent at least 2 unit trust management companies in the marketing and distributing of funds at all times.

Details of the registration criteria for the CUTA are available in the FMUTM’s website,

FMUTM also wishes to announce the name change of our existing distributors with immediate effect.

  • Unit trust agents who are known under the Securities laws as UTCs (Persons Dealing in Unit Trusts) are now been renamed as “Unit Trust Consultants or UTCs”. The change reflect the recognition of the UTC’s changing role in providing advisory services on investments and not merely marketing and distributing unit trust funds per se. There is now a gradual shift among UTCs to move from a sales-oriented approach to a portfolio-managed approach by servicing and retaining clients on a long term basis with a view to optimize returns for investors. Investors should not hesitate to contact their UTCs to discuss their unit trust investments as UTCs are more than willing to be engaged.
  • Banks and stockbroking firms which have been traditionally called Institutional Unit Trust Agents (IUTA) will now be known as Institutional Unit Trust Advisers (IUTA). IUTAs have always been playing an independent and important role in advising and managing their clients’ wealth, thus this new name better reflects IUTAs as advisers to their clients and not agents of the UTMCs.

10th October 2007

Issued on behalf of the Federation of Malaysian Unit Trust Managers. Members of the Press requiring assistance may contact Mr. Lee Siew Hoong, Executive Director, at tel no: +(60)3 – 2093 2600 or fax no: +(60)3 – 2093 2700 or e-mail: [email protected]

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