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                                 of PRS to a portfolio-based structure, allowing investors and intermediaries greater flexibility in investment strategies as well as enabling unbiased goal-based asset allocation. In contrast, the current unit trust structure limits investors to fund strategies adopted by the fund manager, and products carried by agencies and bank distributors. The structure of PAMs will enable a more holistic investor journey, with some customisations along the investment process based on investor’s risk appetite and needs. This is currently limited to high-net worth individuals (HNWIs) and private banking clients. As contributions to PAMs will be enabled via various banking and payment methods, there is merit to enhance the seamlessness between PAMs and the banking sector moving forward.
The intermediation for retirement offerings has also evolved with technology. In some markets, pension asset managers and retirement schemes are increasingly collaborating with fintech players and robo- advisors to offer convenient, accessible and affordable solutions. Similarly, PAMs will liberalise for a broader set of PRS providers in Malaysia, extending beyond the current unit trust companies. This will allow DIMs and other providers to offer innovative and competitive PRS offerings onshore.
Another potential consideration is the creation of TDFs, which will provide a more optimal de-risking process for investors as they age. TDFs are designed to give investors a diversified portfolio that rebalances automatically according to their age and target retirement date. The existing default option framework offers an automatic glide path that switches PRS members’ funds from a higher-risk growth asset allocation to a more conservative and lower-risk asset allocation when they hit the age limit. In comparison, the TDFs’ glide path factors in long-term capital market and demographic assumptions in response to market conditions. This allows investment risk to be adjusted dynamically over the course of the investment period, thus offering a more comprehensive diversification model and smoother de-risking flow for investors.
Over the coming years, there is a need for retirement solutions in Malaysia to evolve holistically to better provide for accumulation and decumulation strategies. This entails enabling a greater range of capital market products such as fixed income and TDFs as well as products across the wider financial services sector, including annuities and reverse mortgages. Greater integration with the insurance and healthcare sectors may also be necessary to enable more effective decumulation products and strategies for the Malaysian market. Investment advisors would need to expand their breadth of products and solutions to better advise investors for retirement protection and investment. Various partnerships and engagements with stakeholders, including co-operatives and employers, will need to be formed to build greater awareness on retirement savings. At the national level, policy measures including tax incentives and matching contributions may also help shape the saving behaviour of investors for retirement.
As investors near retirement, their investment strategies will need to include permutations of growth, steady long-term income and decumulation investments across a range of asset classes to better prepare for their
  short to long-term life changes.
 CAPITAL MARKET MASTERPLAN 3
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