Luno, the leading regulated digital asset exchange in Malaysia, announced the completion of an online nationwide survey aimed at understanding the financial management habits of everyday individuals. Conducted by YouGov, the data was collected from more than a thousand Malaysian adults throughout the country to ensure a statistically accurate representation of the typical saving and investment strategies employed by the general public.
The survey highlighted that Malaysians predominantly view wealth as an important catalyst in attaining greater financial freedom for both themselves and their families. A majority of respondents (60%) stated that the importance of having money to them is for safeguarding their family’s financial well-being. Additionally, 58% of respondents stated the importance of attaining a financially flexible lifestyle in the future.
According to the survey, 64% of the total sampled population stated that they save their money often. The data also illustrated that respondents aged between 18-34 years old were most likely to be in (66%) the regular savers group; in comparison, only 55% of 55+-year-olds are regular savers. This indicates that the younger generations of Malaysians tend to be more proactive in their savings compared to the older generations.
In terms of where these regular savers would likely allocate their savings to, the survey found that 46% and 41% of them prefer to place their savings into government-supported unit trust funds (ASNB) and pension funds (EPF/PRS), respectively. This is possibly due to the fact that these funds are well-established and give decent investment returns, and will compound in value over time.
It is also interesting to note that 26% of these savers stated that they would invest their savings into gold as a store of value; possibly as a way to hedge against inflation.
When it comes to making investment decisions, the survey pointed out that respondents were more likely to be influenced by family members and peers (31%) compared to professional financial advisors or financial service companies (19%). This can be attributed to the fact that Malaysians, especially younger people, have traditionally relied on their more senior family members for guidance in life.
As such, Malaysians tend to adopt the personal financial management best practices that have been tried and tested by their family in the past. According to the data, most (34%) of the respondents tended to seek financial advice about long-term savings and investment strategies, while financial advice on budgeting, financial planning, and debt management was less popularly sought out (24%).
The survey highlighted that Malaysian investors are more confident in the idea of using cryptocurrencies as a viable method in attaining long-term wealth creation and preservation. A total of 62% of current investors stated that they would consider investing in alternative assets like cryptocurrencies as a way to diversify their portfolios.
Furthermore, 37% of respondents stated that the ability to utilize cryptocurrencies for long-term investment purposes was an interesting feature of the digital asset. On a similar note, 40% of respondents stated that using cryptocurrencies as an alternative store of value was an attractive feature as well.
Malaysians are generally thoughtful and aware of risk management when investing in cryptocurrencies. For example, the survey highlighted that 42% of cryptocurrency investors stated that they only purchase cryptocurrencies from reputable and trusted exchanges.
In turn, roughly 43% of these respondents would ensure that they conduct proper and thorough research prior to committing to a transaction. To limit their financial exposure to cryptocurrencies, 57% of respondents stated that they would only invest what they can afford to lose.
Cryptocurrency could see increased participation should the government or the industry increase efforts in promoting financial education initiatives to better educate the general public about alternative assets. According to the survey, 34% of those who do not currently invest said that they would likely start investing with cryptocurrencies if there is better financial education on how to properly trade the digital asset.
On a similar note, 46% of the same group hope that local regulated cryptocurrency exchanges would feature more easy-to-understand financial educational resources as well.
Speaking about the findings, Aaron Tang, Luno Malaysia Country Manager, said, “Our research has clearly demonstrated to us that more work needs to be done, by both regulators and the industry, to better prepare retail investors for the cryptocurrency market. While it is a welcome sight to see that most retail investors do understand the risks associated with cryptocurrency trading and try to mitigate them as best as they can, we still feel the number of investors who actually undergo such prudent measures is low.
“With an increasing number of retail investors starting to gain interest in digital assets, we believe it is now more important than ever to increase efforts in promoting financial literacy initiatives to better educate the general public on the potential uses of cryptocurrencies, as well as the strategies that can be employed to minimize risk exposure.”
Hann Liew, CFP, CFA, Co-Founder & Director Jirnexu, said, “The strong family-oriented culture prevalent within Malaysia means it is not unusual for Malaysians to first experience financial education through family members. Unfortunately, that’s where their financial literacy development stops.
“It is crucial to supplement the early education from the right sources as you grow older. For example, professional licensed financial planners are better equipped than so-called ‘gurus’ to provide counsel that’s tailored to your financial goals and risk appetite. There are various financial education initiatives from the public (such as PIDM, AKPK, and FEN) and private sectors that the everyday Malaysian should tap into to take charge of their finances and make smarter financial decisions.”