KUALA LUMPUR: A survey of 1,000 Malaysians has found that millennials are the most financially resilient generation. Compared with other generations, 69% said they were more optimistic about their financial futures.
Sun Life Malaysia CEO and president Raymond Lew said 71% of millennials expressed more confidence in being able to meet their long-term financial goals compared with 57% of older generations.
“As a very tech-savvy generation, millennials have more tools at their disposal when it comes to financial planning and are more likely to base their decisions on research. However, only 40% of them have a financial plan beyond one year. This puts their financial goals at risk.
“It is worrying that not many have a long-term financial plan in place to meet their life goals. Having a well-thought-out plan needs to be a priority for those looking to secure their financial future, especially in today’s ever-changing and dynamic investment landscape.”
Lew said the index found that across Asia, confidence outstripped preparedness when it came to long-term financial goals.
In Malaysia, 66% of respondents are confident in meeting their long-term financial goals compared with an average of 69% in Asia. Yet only 38% have a financial plan beyond one year compared with the Asia average of 40%.
Malaysians listed retirement and savings as their second highest financial priority, but only 18% have a retirement or pension plan to support their goals.
“Our index provides a window into how households in Malaysia are approaching their financial goals and protecting their future.
“It’s wonderful that so many people feel more optimistic about their finances in 2024, and this optimism deserves a plan to make it a reality. A financial plan provides simple, clear steps to achieving one’s wealth and health goals,” Lew said.
On Malaysians’ level of insurance literacy, he said a majority (72%) acknowledged the role of insurance or takaful in providing financial protection.
“But despite this, only 28% are confident in their knowledge of insurance and takaful products, which also shows the gap between materialising financial optimism and having an actual insurance plan.
“Hence, it is more crucial than ever for Malaysians to acquire sound financial knowledge to bolster their resilience for the future.”
Lew also said over a third of respondents (36%) in Malaysia reported that emotion and trust played a key role in making financial decisions.
“Social media was a common source of financial advice (43%), but few trust it (11%). Close to half (48%) would like to educate themselves more about personal finance, yet are reluctant to ask for help, as fewer than a quarter (24%) seek professional help or advice in managing their finances.”
The survey found that even the wealthiest respondents had gaps relating to preparedness, underestimating expenditure and lack of long-term financial planning. Lower and high-income respondents are almost as likely to exceed monthly budgets, while only 46% of high-income respondents have a financial plan beyond one year.
The study also found that 54% of high-income respondents can save for long-term goals while covering short-term obligations, only slightly higher than 49% of those with lower incomes.
