Malaysia is recognized as the leader in Islamic finance and now is keen to establish its name in Islamic Wealth Management (Islamic Finance News, 2013). In the past few years due to the declining return in investment banking and private equity, more and more banks are shifting their focus to wealth and asset management. Nonetheless, in this area, especially Islamic Wealth Management, the demand for the services is more than the supply, thus require more studies to come up with the best possible products that are Shariah compliant.
Nowadays there are many financial products in the markets regardless whether these products are Shariah-compliant or not. The level of financial literacy is now the focus in many countries, as these products become more complex and varies. The users must be able to understand these products and have a set of skills and knowledge in order to make informed and effective decision makings. The knowledge not only limited to the conventional banking products but also Islamic banking products. Thus, the Islamic Financial literacy is deemed important to all users, especially Muslim. For Islamic wealth management, there are 5 dimensions in it.These are Wealth Generation, Wealth Protection, Wealth Accumulation, Wealth Purification and Wealth Distribution. In 2015, we will conduct several IFWMI Discussion series focusing on Islamic financial planning and debt management.
There are many studies reported the level of awareness of most Muslims in Malaysia are still low with regard to the Islamic Law of Inheritance (Faraid), Wasiyyah, Hibah and Waqf. Thus more education are deemed necessary to educate the public on the importance of these law and also the rights they have. Therefore it is hoped that studies can be conducted to improve the perception, awareness, and knowledge of MalaysianMuslims towards Islamic wealth management, financial planning and estate planning. In 2015, few researches will be conductedas to improve the level of knowledge among Muslims societies about Islamicinheritance system especially Faraid, mostly among youngster and as source of reference in Wasiyyahpractices to policy makers and academicians.
There is a concern on the increasing of household debt over GDP in Malaysia, on average the households are spending majority of their income to pay off their debt. The rate of bankruptcy amongst young executives is increasing and indicate a negative signal to the government. Thus, educating these people on debt management is crucial and IFWMI is currently collaborating with AKPK to train our students to become the debt counselor. It is hope that with this program USIM can give back to the society and improve the ummah.
IFWMI is relevant to Islamic financial institutions (IFIs) as research in IFWMI also includes the Shariah audit issues in the application of the new International Financial Services Act 2013 (IFSA). A research commissioned by KPT on Shariah Audit with the collaboration with Bank Muamalat has opened many training programs to the industry players. In 2014, IFWMI has engaged in a training consultancy project with Bank Muamalat and has already being called to offer this training to other banks in 2015. This will be a kick start future collaborations with co-operatives institutions who are yet to embrace the Islamic finance and investment opportunities.
Research in critical area in Islamic finance such as on Sukuk, takaful as well on issues pertinent to the society such as goldinvestment and zakat are also in IFWMI’s portfolio. IFWMI and other researchers in Jawhar (niche area) of Islamic wealth management continue to provide solutions using our outreach channels for the betterment of the ummah. In order to enrich the future talents in Islamic finance and wealth management, our team also engage in PhD and Master’s supervision.
We pray for Allah to grant us strength to whether the challenges ahead.
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Dr Nuradli Ridzwan Shah Mohd Dali,