News Corp chairman Rupert Murdoch says that Google and Microsoft's access to his newspapers could be limited to a "headline or a sentence or two" once he erects a pay wall around his titles' websites.
Murdoch, in an interview with journalist Marvin Kalb for The Kalb Report on Tuesday, also said he believed most US newspapers would eventually end up charging readers online, like he does with The Wall Street Journal and plans to do with his other properties beginning with The Times of London.
"You'll find, I think, most newspapers in this country are going to be putting up a pay wall," he said. "Now how high does it go, does it allow (visitors) to have the first couple paragraphs or certain feature articles, we'll see.
"We're experimenting with it ourselves," he said.
The News Corp chief said "we're going to stop people like Google and Microsoft and whoever from taking our stories for nothing."
Search advertising had produced a "river of gold" for Google, he said, "but those words are being taken mostly from the newspapers. And I think they ought to stop it, the newspapers ought to stand up and make them do their own reporting or whatever."
Murdoch said he did not expect search engines would pay for access to newspapers. "We'll be very happy if they just publish our headline or a sentence or two and that's followed by a subscription form," he said.
Murdoch dismissed concerns that readers used to getting news on the internet for free would be reluctant to pay.
"I think when they've got nowhere else to go they'll start paying," he said.
Murdoch was also asked about the rivalry between The New York Times and the Wall Street Journal, which has announced plans to launch an expanded New York edition later this month.
"I've got great respect for the Times, except it does have very clearly an agenda," he said. "You can see it in the way they choose their stories, what they put on Page One - anything (President Barack) Obama wants.
"And the White House pays off by feeding them stories," he said.
Murdoch also said he reads The Wall Street Journal and the New York Post each day "because I'm going to be responsible for them." He said he reads "a lot" of the New York Times," but rarely reads The Washington Post although he "probably should."
Murdoch also praised the Apple iPad calling the newly released tablet computer a "glimpse of the future."
He predicted the iPad would have eight or nine competitors in the next 12 months and said the devices could save newspapers.
"There's going to be tens of millions of these things sold all over the world," he said. "It may be the saving of newspapers because you don't have the costs of paper, ink, printing, trucks.
"I'm old, I like the tactile experience of the newspaper," he said, but "if you have less newspapers and more of these that's ok."
"It doesn't destroy the traditional newspaper, it just comes in a different form," he said.
© 2010 AFP, http://newscri.be/link/1064807
Thursday, 8 April 2010
Wednesday, 7 April 2010
US Court Drives FCC Towards Nuclear Option to Regulate Broadbank
- By Ryan Singel
An US federal appeals court all but told the FCC (Federal Communications Commission) Tuesday that it has no power to regulate the internet, putting large chunks of the much-lauded national broadband plan at risk. And the FCC has only itself to blame.
Telecoms and many internet activists have long argued that the internet is a developing technology that was innovating so quickly that strict regulations would hamper it. In 2005, that argument drove the FCC under the Bush Administration to win a fight in the Supreme Court for the right to deregulate broadband providers, classifying them as an “information service,” largely outside the FCC’s power, rather than a “telecommunications service” that could be regulated like the phone system.
Following that win, the FCC simply issued a set of four principles of net freedom that it said it expected broadband companies to follow. They promised that broadband users could plug in whatever devices they wanted to their connection and then use whatever software or online application that they liked — without interference from their provider. Those principles never went through a rule-making period, and when the FCC went after Comcast for blocking peer-to-peer file sharing services, the company sued the commission in court.
And, on Tuesday, won.
Now broadband companies effectively have no regulations that constrain them, as the FCC has left itself with no statutory means to control what telecoms do with their internet networks.
A broadband company could, for instance, ink a deal with Microsoft to transfer all attempts to reach Google.com to Bing.com. The only recourse a user would have, under the ruling, would be to switch to a different provider — assuming, of course, they had an alternative to switch to.
Companies can also now prohibit you from using a wireless router you bought at the store, forcing you to use one they rent out — just as they do with cable boxes. They could also decide to charge you a fee every time you upgrade your computer, or even block you from using certain models, just as the nation’s mobile phone carriers do today.
While this might seem like a win for the nation’s broadband and wireless companies, the ruling could be so strong that it boomerangs on them. For instance, if the FCC is left without the power to implement key portions of the National Broadband Plan — a so-far popular idea — then Congress or the FCC may have to find a way to restore power to the commission. That could leave the FCC stronger than it was before the ruling.
The option favored by public interest groups is for the FCC to take the drastic course of formally reclassifying broadband as a regulated service, reversing the position it held and defended just a few years ago.
“The FCC should immediately start a proceeding bringing internet access service back under some common carrier regulation similar to that used for decades,” said Gigi Sohn, the president of the pro-net neutrality group Public Knowledge. “In our view, the FCC needs to move quickly and decisively to make sure that consumers are not left at the mercy of telephone and cable companies.”
The FCC’s own statement on the decision acknowledges it will have to do just that.
“Today’s court decision invalidated the prior Commission’s approach to preserving an open internet,” said FCC spokeswoman Jen Howard in a written statement. “But the Court in no way disagreed with the importance of preserving a free and open internet; nor did it close the door to other methods for achieving this important end.”
“Other methods” obliquely refer to either Congress passing a law giving it the power (a process that would likely take years) or the FCC reclassifying broadband as a telecommunications service — in legal terms, moving broadband from Title I to Title II of the Telecommunications Act.
Title II-type regulations should be very familiar to most Americans — they are the rules that apply to phone services. For instance, phone customers have the right to attach whatever device they like to the phone network — from rotary-dial machines to modems to fax machines — so long as they don’t harm the network. They also have the right to call anyone else in the country from friends to astrology services, and phone companies are obliged to connect the call — making them into “common carriers.”
Phone companies that own the physical lines that connect to your house have to rent them to competing services at fair rates. They also have to provide cheap services to low-income customers — subsidized by a tax known as the Universal Service Fee. And they have their prices regulated.
That doesn’t mean moving broadband into “Title II” would impose the full spectrum of telephony regulation on internet service. The FCC has a power known as “forbearance” that lets it lift selected obligations, according to Free Press’s policy counsel Aparna Sridhar.
“Let’s say Title II has 50 provisions,” Sridhar said. “The commission can decide 48 of these don’t make sense for broadband, but one or two or three do. It will be a skinny Title II. Monopoly-style rate regulation is not necessarily the outcome.”
Another consideration is whether the FCC would then be in the business of regulating the content of the internet — as it famously does with fines against broadcasters for profanity on the radio or over-the-air television. Sridhar said that wouldn’t have to be the case.
“If the FCC decided to reclassify the underlying transmission, that doesn’t mean that Hulu or The New York Times or your favorite app will be regulated.”
Hoping to prevent the FCC from reclassifying broadband, the Wireless Association — an opponent of net neutrality rules — argued before the ruling arrived that the Comcast case wouldn’t undermine the national broadband plan.
“I don’t think the National Broadband Plan is in jeopardy, based on the Comcast case,” Guttman-McCabe said a day before the ruling. “Look at things about disclosure and even the Universal Service Fund — there is no need to have Title II authority to address those issues.”
But the court’s reasoning undermines Guttman-McCabe’s theory. While it was tangential to the net neutrality case, the appeals court took the time to point out that the Universal Service Fund was approved by the courts only because it was tied to the FCC’s “Title II responsibility to set reasonable interstate telephone rates.” In short, the court is saying that the Universal Service Fund couldn’t be changed to support broadband, since the FCC has no similar mandate to set broadband rates.
The Wireless Association welcomed the ruling in a written statement Tuesday, ignoring the tricky question of how the FCC could implement large portions of the National Broadband Plan without the authority to regulate broadband.
“Today’s unanimous and very thorough opinion in the Comcast case makes clear that the FCC needs to focus on the important task of making the promise of the National Broadband Plan a reality by spurring investment, innovation and job growth, and turn away from calls to impose restrictive regulations on broadband providers and the internet ecosystem,” said Steve Largent, the group’s CEO.
Comcast also welcomed the ruling, while trying to strike a conciliatory note by saying it likes the idea of open internet principles.
“We are gratified by the Court’s decision today to vacate the previous FCC’s order,” said Sena Fizmaurice, a Comcast spokeswoman. “Comcast remains committed to the FCC’s existing open internet principles, and we will continue to work constructively with this FCC as it determines how best to increase broadband adoption and preserve an open and vibrant internet.”
Meanwhile, Thursday marks a now odd deadline the FCC’s attempt to bolster its net neutrality authority by creating a proper rule-making process last fall that would have codified the ad hoc principles it used to go after Comcast.
Companies and interest groups were set to file final comments by Thursday on that rulemaking — which rested on the same arguments the court just struck down.
That makes the proceeding mostly useless, even though the FCC will still likely take the comments to heart, if and when it ever regains any authority over broadband.
Craig A. Rodway,
Source: http://newscri.be/link/1064454
- Court to FCC: You Don’t Have Power to Enforce Net Neutrality
- Comcast Ordered to Allow Free Flow of File Sharing Traffic
- FCC Backs Net Neutrality — And Then Some
Tags: FCC, Net Neutrality
Tuesday, 6 April 2010
The Right Way to Earn Money – Blogging to The Bank 2010
Nowadays, there’s no Internet user out there who doesn’t know what a blog is and that there are thousands of people blogging about every topic under the sun. Even though blogs attract reader traffic every day, there are a lot of people who are not aware that a blog can actually generate a profitable income and can be managed like a long term business. Many individuals of all types have begun blogging for a full-time job and are making good money from these blogs each and every day; this is a little-known fact that numerous individuals do not yet comprehend. Making literally thousands of dollars month in and month out, these bloggers earn a great living by simply posting what is on their minds for other to read. Regular individuals can also make money this way, not only blogger professionals, and in the following review we will demonstrate that Blogging to the Bank 2010 can help the little guys to do it well too.
The fact is that blogging has turned out to be one of the most profitable ways to earn automated money. All kinds of people, with different backgrounds, were inspired to start blogging, so they shared their thoughts with the world, and then got paid for it. Does that really happen? Can you actually make a good source income just by creating your own blog and posting information? Blogging to the Bank 2010 was launched to help people just like you answer those questions and start earning your own money. With Blogging to the Bank 2010 you’ll find everything you need to know to assure you that blogging for money is a viable venture and how you can make it work for you. The system will guide you through setting up your blogging business and instigating your automated income.
The things that Blogging To The Bank 2010 teaches you are not just simple tips and tricks. It goes much deeper. However, this system will revolutionize how you view blogs so that you will be able to confidently make money from yours. The creator of the system who has been backing it all the time, is quite experienced in this area and has been doing it for a long time now. He doesn’t speak theoretically or abstractly. He provides specific examples of blogging for money. He makes it clear that this is something you can do. Blogging for income doesn’t require a genius I.Q. All you need is the blueprint that he will provide you with and you will enjoy success quickly. Clearly, your end results will vary from others because every blog has different interested parties. Some bloggers will make more than the other ones.
If you are looking to make this system work for you and you want to get to be successful online, you will need to put some effort into it, as with any home based business you can expect slow growth at first but as you learn it will grow. Once you have put the work in and have the system in place and the methods down, your business will take off flying. Then you will be able to enjoy watching the money roll into your bank account thanks to the automated system.
So in the end, Blogging To The Bank 2010 is worth every penny. Its a great system that will allow you to make a good deal of money through blogging. While there are many other courses on the Internet that claim to offer similar programs, most of them are scams. This online course gives you everything you’ll need to build a successful online business. It will show you how to build a great blog, then keep building on it along the way. You ultimately decide how much money you will make using the world of blogging.
----------------------------------------------------------------------------------
The fact is that blogging has turned out to be one of the most profitable ways to earn automated money. All kinds of people, with different backgrounds, were inspired to start blogging, so they shared their thoughts with the world, and then got paid for it. Does that really happen? Can you actually make a good source income just by creating your own blog and posting information? Blogging to the Bank 2010 was launched to help people just like you answer those questions and start earning your own money. With Blogging to the Bank 2010 you’ll find everything you need to know to assure you that blogging for money is a viable venture and how you can make it work for you. The system will guide you through setting up your blogging business and instigating your automated income.
The things that Blogging To The Bank 2010 teaches you are not just simple tips and tricks. It goes much deeper. However, this system will revolutionize how you view blogs so that you will be able to confidently make money from yours. The creator of the system who has been backing it all the time, is quite experienced in this area and has been doing it for a long time now. He doesn’t speak theoretically or abstractly. He provides specific examples of blogging for money. He makes it clear that this is something you can do. Blogging for income doesn’t require a genius I.Q. All you need is the blueprint that he will provide you with and you will enjoy success quickly. Clearly, your end results will vary from others because every blog has different interested parties. Some bloggers will make more than the other ones.
If you are looking to make this system work for you and you want to get to be successful online, you will need to put some effort into it, as with any home based business you can expect slow growth at first but as you learn it will grow. Once you have put the work in and have the system in place and the methods down, your business will take off flying. Then you will be able to enjoy watching the money roll into your bank account thanks to the automated system.
So in the end, Blogging To The Bank 2010 is worth every penny. Its a great system that will allow you to make a good deal of money through blogging. While there are many other courses on the Internet that claim to offer similar programs, most of them are scams. This online course gives you everything you’ll need to build a successful online business. It will show you how to build a great blog, then keep building on it along the way. You ultimately decide how much money you will make using the world of blogging.
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Monday, 5 April 2010
5 Secrets of YouTube’s Success
Astley: Getty; Vader, dalmatian, Cyrus: Corbis
The Content
It elevated the absurd.
These early YouTube hits turned unknowns into Internet sensations. We tracked down five surprise superstars to see how they’ve capitalized on their fame.
— Steven Leckart
— Steven Leckart
“Evolution of Dance”
Date uploaded 2006 Views to date 137 million
Motivational speaker Judson Laipply first performed his pop-dance montage as the finale of his act. Now it’s the second-most watched clip on YouTube. His popularity bumped up his speaking fees and inspired him to publish a self-help book, Might As Well Dance.
Excerpts from an interview with Judson Laipply, inspirational comedian:
“Numa Numa”
Date uploaded 2006 Views to date 42 million
Gary Brolsma’s spirited lip sync to a techno tune inspired legions of imitators — including a spoof on South Park. He has since launched his own Numa Network and appeared in a Vizio commercial during the Super Bowl. The 24-year-old still lives at home with his mom.
Excerpts from an interview with Gary Brolsma, singer/musician:
“Here It Goes Again”
Date uploaded 2006 Views to date 50 million
When LA band OK Go couldn’t afford to make a video, singer Damian Kulash tapped his sister, rookie filmmaker Trish Sie, to shoot it. The band’s treadmill moves won the vid a Grammy, and the album sold more than 250,000 copies in the US. Sie now directs TV commercials.
Excerpts from an interview with Trish Sie, director/choreographer:
“Winnebago Man”
Date uploaded 2006 Views to date 1.5 million
VHS copies of a 1989 sales video featuring foulmouthed pitchman Jack Rebney were circulating in the ’90s, but YouTube made them into a viral hit. The reclusive Rebney, age 80, is now the subject of a documentary, Winnebago Man, due out this summer.
Excerpts from an interview with Ben Steinbauer, director/writer/producer:
“Chocolate Rain”
Date uploaded 2007 Views to date 47 million
Tay Zonday’s piano balladeering took center stage when he was still a PhD student. The 27-year-old now lives in LA as a working musician, licensing songs, selling tracks, appearing in Dr Pepper commercials, and cashing in on the ads sold against his YouTube videos.
Excerpts from an interview with Tay Zonday, singer/actor:
Wired’s YouTube Video Jukebox
Evolution of Dance
Numa Numa
Here It Goes Again
Winnebago Man
Chocolate Rain
The Business Model
It got creative with advertising.
Once YouTube broke out of the one-size-fits-all mindset, the money started to flow.
— Fred Vogelstein
By 2006, YouTube was a hot property. Microsoft, Yahoo, and News Corp. were all reportedly looking to buy it. Deep-pocketed Google won the day, paying $1.65 billion. Free with purchase: a financial sinkhole. YouTube had no profits, and no plan for creating any.— Fred Vogelstein
Worse, the more popular the site grew, the more money it lost — a fiscal annoyance that soon became a huge problem for Google. True, the emperors of search built their own servers and negotiated some of the cheapest bandwidth rates in the world. But at YouTube scale, even cheap was starting to feel expensive. As YouTube topped more than a billion clips a day, Web video began to cost Google hundreds of millions of dollars a year.
The losses proved so great — and a business model so elusive — that some company insiders wondered whether the deal might turn out to be one of the dumbest business moves in the short and frequently witless history of the Internet.Fast-forward almost four years and it looks like the Google team that was tasked with making YouTube profitable might have cracked the code. “We’re finally at a point where more traffic doesn’t hurt us. It helps,” says director of monetization Shishir Mehrotra.
The revelation that got the company to that point seems obvious in retrospect: YouTube stopped copying Google. The search giant’s success is based on the premise that all visitors want the same thing: to search, find, and leave as quickly as possible. But YouTube visitors have much more diverse needs. Some come to watch short clips of cats doing silly things, others to view TV shows or how-to videos. Some have 30 seconds to kill, others spend an afternoon. Mehrotra and his team developed different advertising approaches for each class of user.
So say you want to see a TV show. Mehrotra’s plan could let you choose a long commercial at the beginning or the more traditional interspersed format. He’s also toying with letting users skip the ads. Amazingly, Mehrotra says, sponsors love that last part, because viewers who choose not to skip them are opting in — priceless reassurance for advertisers that allows the big G to charge higher rates.
Another major step was the way YouTube approached illegally uploaded material (see “It Plays Nice With Hollywood,” right). Instead of pulling down copyright-protected clips, the system lets studios and labels cash in on the ads sold against their content. Rights holders can earn a cut off videos they didn’t even upload.
Between these new tactics and the ordinary ads, independent analysts expect YouTube to generate as much as $700 million in revenue this year. That’s still a long way from justifying its high price tag, but at least the sinkhole is starting to look a little like a cash cow.
Monkey, baby, kitten: Corbis
The Legal Picture
It plays nice with Hollywood.
YouTube has a smart way to spot copyrighted content. And the studios are cashing in.
— Steven Levy
— Steven Levy
Star rating distrubtion
The Digital Millennium Copyright Act provides video-sharing sites some protection against their users’ transgressions, but it’s still a legal gray area. “As traffic grew, so did the number of illegal files,” says Chris Maxcy, YouTube’s director of partner development. “We started to ask ourselves, how can we even control this?”
Engineers began taking a hash — a digital representation — of any infringing video. If someone tried to upload the same clip again, it could be blocked. But the system couldn’t recognize slightly different versions of the same content, so some copies slipped through. By 2007, at least six hours of video was being uploaded every minute, a good portion of it illegal.
YouTube needed a smarter system, and later that year it came up with something called Content ID. It works like this: Engineers create a spectrogram — a graphical representation of audio and video output — of each file. Unlike hashes, spectrographic data can be scanned for similarities, not just exact duplicates. When a user uploads something, it’s cross-referenced with a database that’s now brimming with more than a million reference files. If a close match turns up, the system checks the guidelines for that piece of content. If it’s cleared for posting, YouTube alerts the copyright holder, which can choose simply to monitor its stats or begin sharing the ad revenue.
Today a third of the ads on YouTube are served alongside copyrighted content found through the system. Companies like Sony, Warner Bros., EMI — even copyright stickler Disney — participate, allowing the movie-trailer remixes and kitten videos backed by pop soundtracks to keep on streaming.
YouTube Videos Watched Per Month (Per Viewer in the U.S.)
Source: Comscore
Source: Comscore
The Content Producers
It launched a new creative class.
YouTube’s top celebs are quirky and lo-fi, but they draw audiences any cable network would envy.
— Claude Brodesser-Akner
— Claude Brodesser-Akner
Fred Figglehorn
Joined YouTube October 2005 Total views 452 million
Sixteen-year-old Lucas Cruikshank has been uploading videos of himself portraying a lonely kid for about five years. Annoyed by his grating, computer-enhanced voice? Wait till you hear about his six-figure income and freshly inked movie deal.
Ryan Higa
Joined YouTube July 2006 Total views 290 million
At 18, Ryan Higa was studying nuclear medicine at UNLV. Now 19, he has switched his major to film and collects a tidy allowance from his channel, Nigahiga, which offers lo-fi parodies and polemics riffing on everything from Asian TV to the inanity of Twitter.
NewsPoliticsNews
Joined YouTube February 2009 Total views 57 million*
When “doctor Jon” started posting clips of the political commentariat’s latest distortions, he drew millions of views. Then he got banned for posting network content without permission. Twice. Now the anonymous MD curates the videos for Mediaite.
*Includes sister channel news1news.
David Colditz
Joined YouTube August 2007 Total views 146 million
The musician with the most subscribers on YouTube isn’t Jay-Z or Miley Cyrus. It’s David Colditz, aka Dave Days, whose power-pop parodies have earned him 146 million views. Colditz is at work on an album, but he might not seek a record deal. He might not need one.
Natalie Tran
Joined YouTube September 2006 Total views 212 million
A student at the University of New South Wales, the Internet-famous Tran has no interest in Hollywood. “I’m unambitious,” she says. She’s satisfied to upload her observational comedy while pulling down a nice income from the ads YouTube serves against her clips.
Wired’s YouTube Video Jukebox
Fred Figglehorn
Ryan Higa
NewsPoliticsNews
David Colditz
Natalie Tran
The Future
It’s willing to reinvent itself.
We asked Margaret Gould Stewart, YouTube’s head of user experience, to explain how her redesign of the site will keep you hooked.
— Mathew Honan
Why mess with a good thing? — Mathew Honan
The old YouTube worked really well if you knew what you wanted to watch, but there were a lot of situations that we could’ve been serving better. We want to get incredibly smart about putting videos in front of you that you compulsively have to watch.
How do you do that? By bringing context into the experience. Historically, the site has been designed around the video you’re watching right now — related videos use that first clip as a starting point. But what if you’re not just looking for content related to that subject? People who come to the site from social networks might be more interested in what else their friends are watching. The idea is to understand the mindset that people bring with them and build off that.
Does that mean a lot of the changes are aimed at users who have an account with YouTube?
Exactly. If you log in, you can import contacts from Facebook or Gmail, and that’ll push a pretty rich set of videos at you immediately — things your friends have favorited or rated or uploaded.
What if you don’t log in?
We’ll still show you the five videos that everybody should watch today. You know — a plane has crashed in the Hudson River. But it’s kind of a give-and-take: We want to reward people who give us information, so they see that it’s worth it.
What’s the ultimate goal?
Once we process these social signals — your behaviors and actions — we’ll be able to deliver a whole playlist that’s made just for you. We want you to go into passive mode, sit back, and watch.
The Most Discussed Videos of All Time
01 “10 questions that every intelligent Christian must answer” (909,978 comments) 02 “Macedonia Is Greece” (797,051 comments) 03 “Susan Boyle — singer — Britain’s Got Talent 2009” (507,691 comments) 04 “Leave Britney Alone!” (457,438 comments) 05 “Miley Cyrus — ‘7 things’” (453,649 comments)
Margaret Gould Stewart, Susan Boyle: APSource: http://newscri.be/link/1062599
Report: Apple adds engineers for new chip design
Apple is adding engineers from Intrinsity, a small chip company that has been working with Samsung to boost processor performance and may be connected to the iPad's A4 chip design, according to a Macrumors report.
As reported last month, Linley Gwennap, president and principal analyst of The Linley Group, believes the iPad's 1GHz A4 chip uses an ARM CPU designed by Intrinsity and manufactured by Samsung. Apple's iPhone also uses ARM chips supplied by Samsung. Typically, chip companies take the basic ARM blueprint and mix and match features as they see fit.
Source: http://newscri.be/link/1062452
As reported last month, Linley Gwennap, president and principal analyst of The Linley Group, believes the iPad's 1GHz A4 chip uses an ARM CPU designed by Intrinsity and manufactured by Samsung. Apple's iPhone also uses ARM chips supplied by Samsung. Typically, chip companies take the basic ARM blueprint and mix and match features as they see fit.
The iPad's main circuit board with the A4 chip: Intrinsity inside? And notice the preponderance of Samsung-branded silicon
A Wealth of Issues for Financial Planners
Progress and problems of the financial planning sector
By FINTAN NG
fintan@thestar.com.my
ALTHOUGH financial planning has been around in the local financial services landscape for years, most people are not aware of the industry and what its practitioners, who call themselves wealth planners or financial planners, do.
The situation becomes even more confusing to the average person with little or no knowledge of what financial planning is as there are now products that are bundled with insurance plans.
There are financial planners who are independent of any bank or product supplier and then there are tied agents of these players. Much of the industry is regulated by the Securities Commission and Bank Negara.
The question arises – are insurance agents financial planners too, in the broadest sense of the term, since they too help clients plan their finances by making sure their clients do not get into debt when they fall sick?
Readers should not forget that health plans have the investment-linked option and these options are often touted as a way to save. But an observer say insurance health plans, even if it comes with the investment-linked option, should not be seen as a savings plan at all.
Financial Planning Association of Malaysia (FPAM) president Wong Boon Choy says the debate is still raging as to what constitutes financial planning.
The FPAM has 10,000 individual members and 44 corporate members.
“There are purists on the one hand who insists that financial planning involves pure advisory work and all else is a sham. On the other hand, there are those who strive to seek a better way to serve their clients in their provision of financial products and services and seek to utilise the financial planning approach to ensure that they recommend the appropriate products and services,” Wong points out.
“At the end of all these discussions, the key, we feel, is still for consumers to be well educated and have a personal interest in their finances, and for finance professionals, no matter in which sector they are in, to be in possession of the necessary knowledge and competencies and that in all communication between them, appropriate disclosures and transparency prevail,” Wong says.
A Penang-based practitioner, Lion Wealth Advisors Sdn Bhd director K.P. Thum sums up the issues of the industry into four areas – human resource, markets, regulations and limited choices in products.
He says there are not many CFP, RFP or ChFC holders in the country. “People are not interested to take it up full time because there’s no track record of success,” Thum says.
He believes the public awareness of the benefits of financial planning or engaging a financial planner is lacking because there is a lack of concerted action on the part of players such as practitioners, suppliers, authorities, associations and other related parties to educate the public.
“There may also be confusion and lack of trust as there have been instances of fraud by non-licensed practitioners claiming themselves to be financial planners,” Thum says, adding that the concept of paying fees to write a financial plan is still very new.
He points out that one example of the low level of “financial intelligence” of the general public is the way most are attracted by high returns without knowing the risks.
“Most are interested in the features of a product such as the investment return but are not interested to find out whether the product is helping them meet their financial goals or whether it’s necessary or duplicates what they already have,” Thum says.
He says the authorities may also be unsure on how to regulate the industry especially for independent financial planners not attached to a bank or supplier and who imposed high requirements and conditions for practitioners.
“Major financial product providers do not open their products to independent financial planners because of how it may affect existing channels such as tied agents and banks,” Thum says.
Standard Financial Planner Sdn Bhd chief executive officer Alfred Sek says the situation is confusing for the public as financial institutions such as banks, insurance and unit trust companies are offering financial planning services through their agents and relationship managers.
He says financial planners need to be licensed (as they are by the Securities Commission and Bank Negara) but often the ones in banks are not.
“The problem is people chose to ignore it as there are no enforcement and not enough publicity to inform the people. If this is allowed to go on, the growth of the local financial planning industry will be greatly affected,” Sek says.
He says one option is to review the licensing entry requirement to allow more practitioners from the insurance and unit trust industries to be licensed as practised in Singapore and other developed countries.
“To promote and create value for the licensed firms, all stakeholders in the financial services industry must work together to address the obstacles and challenges faced by the practitioners,” Sek says.
ALTHOUGH financial planning has been around in the local financial services landscape for years, most people are not aware of the industry and what its practitioners, who call themselves wealth planners or financial planners, do.
The situation becomes even more confusing to the average person with little or no knowledge of what financial planning is as there are now products that are bundled with insurance plans.
There are financial planners who are independent of any bank or product supplier and then there are tied agents of these players. Much of the industry is regulated by the Securities Commission and Bank Negara.
The question arises – are insurance agents financial planners too, in the broadest sense of the term, since they too help clients plan their finances by making sure their clients do not get into debt when they fall sick?
Readers should not forget that health plans have the investment-linked option and these options are often touted as a way to save. But an observer say insurance health plans, even if it comes with the investment-linked option, should not be seen as a savings plan at all.
Financial Planning Association of Malaysia (FPAM) president Wong Boon Choy says the debate is still raging as to what constitutes financial planning.
The FPAM has 10,000 individual members and 44 corporate members.
“There are purists on the one hand who insists that financial planning involves pure advisory work and all else is a sham. On the other hand, there are those who strive to seek a better way to serve their clients in their provision of financial products and services and seek to utilise the financial planning approach to ensure that they recommend the appropriate products and services,” Wong points out.
“At the end of all these discussions, the key, we feel, is still for consumers to be well educated and have a personal interest in their finances, and for finance professionals, no matter in which sector they are in, to be in possession of the necessary knowledge and competencies and that in all communication between them, appropriate disclosures and transparency prevail,” Wong says.
A Penang-based practitioner, Lion Wealth Advisors Sdn Bhd director K.P. Thum sums up the issues of the industry into four areas – human resource, markets, regulations and limited choices in products.
He says there are not many CFP, RFP or ChFC holders in the country. “People are not interested to take it up full time because there’s no track record of success,” Thum says.
He believes the public awareness of the benefits of financial planning or engaging a financial planner is lacking because there is a lack of concerted action on the part of players such as practitioners, suppliers, authorities, associations and other related parties to educate the public.
“There may also be confusion and lack of trust as there have been instances of fraud by non-licensed practitioners claiming themselves to be financial planners,” Thum says, adding that the concept of paying fees to write a financial plan is still very new.
He points out that one example of the low level of “financial intelligence” of the general public is the way most are attracted by high returns without knowing the risks.
“Most are interested in the features of a product such as the investment return but are not interested to find out whether the product is helping them meet their financial goals or whether it’s necessary or duplicates what they already have,” Thum says.
He says the authorities may also be unsure on how to regulate the industry especially for independent financial planners not attached to a bank or supplier and who imposed high requirements and conditions for practitioners.
“Major financial product providers do not open their products to independent financial planners because of how it may affect existing channels such as tied agents and banks,” Thum says.
Standard Financial Planner Sdn Bhd chief executive officer Alfred Sek says the situation is confusing for the public as financial institutions such as banks, insurance and unit trust companies are offering financial planning services through their agents and relationship managers.
He says financial planners need to be licensed (as they are by the Securities Commission and Bank Negara) but often the ones in banks are not.
“The problem is people chose to ignore it as there are no enforcement and not enough publicity to inform the people. If this is allowed to go on, the growth of the local financial planning industry will be greatly affected,” Sek says.
He says one option is to review the licensing entry requirement to allow more practitioners from the insurance and unit trust industries to be licensed as practised in Singapore and other developed countries.
“To promote and create value for the licensed firms, all stakeholders in the financial services industry must work together to address the obstacles and challenges faced by the practitioners,” Sek says.
NEM – a steep hill to climb
COMMENT BY STEWART FORBES
WITH the publication of Part 1 of the National Economic Advisory Council’s New Economic Model (NEM) For Malaysia report on March 30, the Prime Minister has committed the country to a fundamental process of change.
Much of the NEM report’s findings are already known and have been debated extensively by both the Government and the private sector.
The falling levels of foreign direct investment (FDI), the relatively poor levels of productivity, the over-dependance on foreign labour and the low levels of expenditure on research and innovation have all been identified. Similarly, the distortions emanating from a low-cost, subsidy-rife economy and some poor perceptions of Malaysia externally are not newly discovered.
Where the NEM report scores, however, is in its bringing together all the disparate elements in our current economic situation and setting out in stark detail the implications for Malaysia if no change is made.
While growth continues, it is fragile, and if the country is to continue to be locked into the so-called “middle-income trap” then not only will we see many nations increase the economic distance between themselves and Malaysia but other, more aggressive developing nations, will overtake us, pushing Malaysia to lower and lower world rankings.
Ultimately, instead of Malaysia gaining “promotion” to the champions league of nations, we could find ourselves “relegated” to division two or even lower.
And here is our dilemma: If Malaysia’s attractiveness as an investment destination deteriorates, then economic activities will decline since we do not have the population base to drive growth solely through domestic consumption. And if economic growth declines then the country cannot afford the incentives and fiscal policies that are necessary to sustain investment attractiveness. Thus, a vicious downward spiral is generated.
Accordingly, as the Government knows well, and has articulated both verbally and now through the comprehensive NEM report, there is no status quo solution – we cannot stand still. Malaysia either accelerates upwards economically or risks a downward spiral and possible stagnation.
Much to applaud
This might seem a dismal picture but just as the issues are identifiable, so too are many of the solutions. From a private sector perspective there is much to be applauded in the honest appraisal presented by the NEAC’s NEM report and many of the solutions proposed will materially improve economic performance. But only if there is a concerted effort to implement change and the will exists to take what in some cases will be difficult decisions.
There is no one “silver bullet” that will fix everything; a range of actions is necessary, some palatable and some less so. But seeking to implement only the popular measures and ignore the unpopular ones is a sure recipe for failure.
From a private sector point of view, therefore, are the outline proposals in the NEM report likely to stimulate business and allow the NEM to emerge? At the core of any success must be business growth, new sources of income generation and increased investment.
While it is not the purpose of these short comments to examine the socio-economic aspects of the NEM, it should be apparent that the laudable goals of poverty eradication, affirmative action programmes in favour of under-privileged groups and a more equitable distribution of wealth cannot take place if there is no wealth to be distributed.
Thus, a move towards a high-income economy with higher value-added business contributing to a significantly stronger gross domestic product (GDP) growth is a mandatory success factor for the NEM and its associated objectives.
The NEM calls for a reinvigoration of the private sector and a return to private sector-led investment levels of the 70s and 80s rather than the Government-led investment scenario that now appears to be the norm.
This is a difficult challenge and a steep climb. Fundamentally, when the details of the implementation of the NEM are revealed over the next few months following consultation with stakeholders, investors will want to see a number of clear indications of commitment to a more conducive business environment. Some of these would include:
● First and foremost evidence that the Government will take the difficult decisions necessary without backtracking. It is inevitable that some reforms not favour certain groups who benefit today from special protected positions. These groups are always the most vociferous in defending their positions.
If the Government allows itself to be browbeaten into reversing reform policies once agreed upon, then the entire structure of NEM will be compromised and sceptical investors will run for cover to business regimes that offer greater certainty;
● Foreign investors must be assured of ownership and management of their business operations. This is more relevant in the context of new high-value industries and services where intellectual capital and IP form a larger element of the business capital than bricks and mortar and machinery.
Growth from tech transfer
While positive steps have already been taken in this direction, all government ministries need to embrace an open, liberalisation agenda so that growth is derived more from technological transfer and the multiplier effects of clustering and new cutting-edge industries, rather than demanding a minority slice out of every pie.
The proposed corporatisation of Malaysian Industrial Development Authority, and its enhanced role in investment promotion, is an important component in a better integrated process of investment identification, negotiation and finalisation;
● The NEM must deliver on the human capital needs of a new economy. This is perhaps the single biggest problem confronting us today and is a real barrier to developing new business, especially in the high-tech arena.
A reduction in over-dependance on foreign labour will spur a greater emphasis on productivity in support of a higher income model.
At the same time, the new technologies and processes associated with the desired new investments demand skills that are in limited supply today. This is ultimately unacceptable to investors; and
● Finally, the total environment surrounding business will need attention under the NEM, the fiscal environment must encourage risk taking and innovation through appropriate incentives and low corporate taxation. Corruption must be a zero tolerance feature of society and personal security must be an automatic assumption of residents’ rights.
The NEM report is a positive and honest appraisal of the current national dilemma and points clearly to desired reforms to advance the nation, both economically and socially. It has raised considerable expectation in the minds of both the people and business. If it fails to deliver through a lack of political will, excessive compromise or prevarication, then the negative impact may be severe.
The private sector has concerns that previous experience suggest deliverables rarely match rhetoric and both domestic and foreign investors will find it difficult to re-energise in terms of expansion or new investment if uncertainty prevails.
The clarity and forthrightness of the NEM report Part 1 make it an exemplary document. It must now be matched with equal clarity and decisiveness in setting out and implementing the action agenda.
We have a steep hill to climb, but the ultimate goal justifies the effort and support by all Malaysians.
● The writer is executive director of the Malaysian International Chambers of Commerce and Industry.
Much of the NEM report’s findings are already known and have been debated extensively by both the Government and the private sector.
The falling levels of foreign direct investment (FDI), the relatively poor levels of productivity, the over-dependance on foreign labour and the low levels of expenditure on research and innovation have all been identified. Similarly, the distortions emanating from a low-cost, subsidy-rife economy and some poor perceptions of Malaysia externally are not newly discovered.
Where the NEM report scores, however, is in its bringing together all the disparate elements in our current economic situation and setting out in stark detail the implications for Malaysia if no change is made.
While growth continues, it is fragile, and if the country is to continue to be locked into the so-called “middle-income trap” then not only will we see many nations increase the economic distance between themselves and Malaysia but other, more aggressive developing nations, will overtake us, pushing Malaysia to lower and lower world rankings.
Ultimately, instead of Malaysia gaining “promotion” to the champions league of nations, we could find ourselves “relegated” to division two or even lower.
And here is our dilemma: If Malaysia’s attractiveness as an investment destination deteriorates, then economic activities will decline since we do not have the population base to drive growth solely through domestic consumption. And if economic growth declines then the country cannot afford the incentives and fiscal policies that are necessary to sustain investment attractiveness. Thus, a vicious downward spiral is generated.
Accordingly, as the Government knows well, and has articulated both verbally and now through the comprehensive NEM report, there is no status quo solution – we cannot stand still. Malaysia either accelerates upwards economically or risks a downward spiral and possible stagnation.
Much to applaud
This might seem a dismal picture but just as the issues are identifiable, so too are many of the solutions. From a private sector perspective there is much to be applauded in the honest appraisal presented by the NEAC’s NEM report and many of the solutions proposed will materially improve economic performance. But only if there is a concerted effort to implement change and the will exists to take what in some cases will be difficult decisions.
There is no one “silver bullet” that will fix everything; a range of actions is necessary, some palatable and some less so. But seeking to implement only the popular measures and ignore the unpopular ones is a sure recipe for failure.
From a private sector point of view, therefore, are the outline proposals in the NEM report likely to stimulate business and allow the NEM to emerge? At the core of any success must be business growth, new sources of income generation and increased investment.
While it is not the purpose of these short comments to examine the socio-economic aspects of the NEM, it should be apparent that the laudable goals of poverty eradication, affirmative action programmes in favour of under-privileged groups and a more equitable distribution of wealth cannot take place if there is no wealth to be distributed.
Thus, a move towards a high-income economy with higher value-added business contributing to a significantly stronger gross domestic product (GDP) growth is a mandatory success factor for the NEM and its associated objectives.
The NEM calls for a reinvigoration of the private sector and a return to private sector-led investment levels of the 70s and 80s rather than the Government-led investment scenario that now appears to be the norm.
This is a difficult challenge and a steep climb. Fundamentally, when the details of the implementation of the NEM are revealed over the next few months following consultation with stakeholders, investors will want to see a number of clear indications of commitment to a more conducive business environment. Some of these would include:
● First and foremost evidence that the Government will take the difficult decisions necessary without backtracking. It is inevitable that some reforms not favour certain groups who benefit today from special protected positions. These groups are always the most vociferous in defending their positions.
If the Government allows itself to be browbeaten into reversing reform policies once agreed upon, then the entire structure of NEM will be compromised and sceptical investors will run for cover to business regimes that offer greater certainty;
● Foreign investors must be assured of ownership and management of their business operations. This is more relevant in the context of new high-value industries and services where intellectual capital and IP form a larger element of the business capital than bricks and mortar and machinery.
Growth from tech transfer
While positive steps have already been taken in this direction, all government ministries need to embrace an open, liberalisation agenda so that growth is derived more from technological transfer and the multiplier effects of clustering and new cutting-edge industries, rather than demanding a minority slice out of every pie.
The proposed corporatisation of Malaysian Industrial Development Authority, and its enhanced role in investment promotion, is an important component in a better integrated process of investment identification, negotiation and finalisation;
● The NEM must deliver on the human capital needs of a new economy. This is perhaps the single biggest problem confronting us today and is a real barrier to developing new business, especially in the high-tech arena.
A reduction in over-dependance on foreign labour will spur a greater emphasis on productivity in support of a higher income model.
At the same time, the new technologies and processes associated with the desired new investments demand skills that are in limited supply today. This is ultimately unacceptable to investors; and
● Finally, the total environment surrounding business will need attention under the NEM, the fiscal environment must encourage risk taking and innovation through appropriate incentives and low corporate taxation. Corruption must be a zero tolerance feature of society and personal security must be an automatic assumption of residents’ rights.
The NEM report is a positive and honest appraisal of the current national dilemma and points clearly to desired reforms to advance the nation, both economically and socially. It has raised considerable expectation in the minds of both the people and business. If it fails to deliver through a lack of political will, excessive compromise or prevarication, then the negative impact may be severe.
The private sector has concerns that previous experience suggest deliverables rarely match rhetoric and both domestic and foreign investors will find it difficult to re-energise in terms of expansion or new investment if uncertainty prevails.
The clarity and forthrightness of the NEM report Part 1 make it an exemplary document. It must now be matched with equal clarity and decisiveness in setting out and implementing the action agenda.
We have a steep hill to climb, but the ultimate goal justifies the effort and support by all Malaysians.
● The writer is executive director of the Malaysian International Chambers of Commerce and Industry.
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