Aidil Akbar: Managing Wealth for Future Investment

Young and highly energetic. That’s the mental picture people get of Aidil Akbar Madjid. Although relatively young, his career has skyrocketed. “If that man contacts you, tell him to talk to me,” is what Aidil, born on July 19, 1973, will tell a client. Understandably, he is a financial planner, a profession that was virtually unheard of in Indonesia before the late 1990s.

Today he is chairman of the International Association of Registered Financial Consultants (IARFC) Indonesia. IARFC was established in the United States and now has offices in over 25 countries, including Indonesia. Aidil is also president director of a number of companies, namely Pavilion Wealth Management, PT Pavilion Capital, PT Inamas Sakti Sejahtera and PT Global Financial Services, while at PT Trimitra Sejati Sejahtera he is the finance director.

Aidil, who is addressed as Akbar, has been quite consistent in his job choices. He has been in financial planning and investment management since 1994. His career in these two sectors began in 1994 when he was appointed junior financial planner at Sun America, an insurance company in Los Angeles, the U.S.

Then he became interested in stock trading and joined AmeriTrade before moving to Lazar & Associates, a public relations, translation and interpretation company. Finally, he was senior financial advisor at American Express (AMEX) in the U.S. before returning to Indonesia in 2000.

Once back in Indonesia, he joined Manulife Asset Management Indonesia as a senior manager before he was eventually named associate director and director at Pavilion Capital. Today, he holds top positions in a number of companies. However, Akbar said all this had to be done consistently with a willingness to continue learning.  

His climb up the career ladder deserves kudos. “I had my first office job in the U.S. in 1994 and earned US$1,200. If $1 was worth Rp 2,500, my salary at that time was Rp 3 million. If you calculate it in terms of the current exchange rate of Rp 9,000 to the dollar, my first salary was close to Rp 11 million,” he said. He first started working as a junior high school third grader in Tokyo, Japan.

He began with part-time work at Restaurant Indonesia and then joined a musical band that performed in a nightclub every Friday and Saturday night. While taking university lectures in the States, he worked at an office and also did odd jobs, such as restaurant work and delivering The Wall Street Journal.  

His interest in financial planning began by coincidence. “In 1994, while I was still studying at university, someone came to the campus to give a presentation. He was offering variable life insurance, known in Indonesia as unit-linked products. “I started learning about investing in this product and then asked the man whether I could also join the company,” he said.

He has since developed a great love for this particular profession, which he considers interesting because it has a considerable social element. In short, he can help someone plan their financial future and provide suggestions about how to manage their investments.

“In addition, I meet a lot of clients with various financial problems and various desires. So I always have to deal with different cases and therefore I never get bored,” he said.  

Wealth management is relatively new in Indonesia. Akbar, however, is optimistic that this particular business has bright prospects. If it is practiced correctly and professionally, he said, wealth management is very useful and promises a bright prospect. Wealth management is a process that continues until financial goals are reached. It takes great patience, persistence and discipline on the part of the wealth manager to attain success.

“The more cases or clients you handle, the more practical knowledge about wealth management you acquire. That’s why experience is very important here,” Akbar said.  

Unfortunately, he said, wealth management euphoria has led to the emergence of some people claiming to be very knowledgeable wealth managers but they have little experience in this area. A financial planner, Akbar said, is a professional seeking to help a client plan his finances. A financial planner helps provide a planning solution, choices in a client’s finance, wealth or investment management so that the client’s financial needs for short-term, middle-term and long-term will be fulfilled.

It is the job of this planner to devise an investment strategy that suits the character of the client with a view to reaching the client’s dream of financial/investment purposes.  

To devote yourself to this profession is indeed not easy. Based on the experience and advanced structure in the U.S., where wealth management and financial planning have been practiced for 30 years, wealth management and financial planning deals a lot with investment products. That’s why it is mandatory for a wealth manager or a financial planner to have a license as a seller of investment products.  

However, this profession is relatively new in Indonesia so it is yet to be regulated in detail in the law on the capital market. Herein lies the significant role of the association. Which association should be chosen, then? Of course, an association of international scale and one originating in the country where this profession first came into being. Why must it be of international scale?

Because investment techniques and the types of investment products are cross-border in nature in the sense that they can be used by anybody from any country, although in some cases people from certain countries are not allowed to invest in certain investment products.  

“Two things are different in all countries: their taxation system and their law. These two are used as references in the drawing up of their planning. It would be narrow-minded to think of issuing local certifications while the international standard is recognized all over the world,” he stressed.

IARFC has carried out training since 2003 and over 1,300 people have taken the basic class. Meanwhile, some 300 people have been certified. Some of these 300 people are practicing as financial planning and wealth management consultants. At present, there are over 600,000 clients in the ultra high net-worth, high net-worth and affluent categories. They receive services through priority banking, private banking and wealth management services in banking institutions in Indonesia. As for middle-class people, they require this service in a slightly different form.

Wealth management has developed rapidly, particularly in major cities. The trend began in Asia in the late 1990s and early 2000. The reason was a drop in interest rates in advanced countries. Cheap investment instruments in post-monetary-crisis Asia saw a lot of funds flow into Asia in the form of plain and structured investment.

As many investment products came into being, clients required additional services to determine which investment products they should take and to manage their investment portfolio. The wealth management business has become all the more brisk with the introduction of unit-linked products, which combine investment and insurance.

“The new class also paying attention to and requiring the services of wealth management consultants constitutes micro entrepreneurs, or medium, small and micro entrepreneurs. So wealth management is needed not only by wealthy people with assets worth billions of rupiah,” Akbar said.

It seems that a financial planner is a promising profession. How many clients can a financial planner deal with?

“It depends on the level of service provided. Do you provide a complete service or do you give service case by case depending on needs? If you give a complete service, you can handle about 100 clients, but if your service is given case by case, you can handle many more. What must be borne in mind is that wealth management needs personal service from a consultant, so the more clients you handle, the lower the quality of the service you give. As for the fee, it is yet to be standardized but an IARFC graduate generally charges a minimum fee of between Rp 3.5 million and Rp 5 million for the drawing up of a complete plan,” he said.  

“If you offer a complete service, the contract will be valid for one year and can be renewed with the payment of fees for the next year,” he added. (Iwan Suci Jatmiko)  

The Jakarta Post, January 16, 2008    

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