Personal financial planning crucial to economic development
Personal financial planning crucial to economic development
GDP growth must be accompanied by personal financial development, economic experts said at a seminar on Thursday.
The event, themed “Personal Financial Planning in Viet Nam - Current Situation and Solutions” was held by the Viet Nam Financial Consulting Association (VFCA).
At the seminar, Ngo Thanh Huan, Director of Personal Finance Division - FIDT Joint Stock Company, a member of the Expert Council - VFCA, said that by 2030-2040, Viet Nam will have about 20 million people reach their retirement age. Meanwhile, Viet Nam is in the group of countries with the highest pension payment rate in the world, with a maximum payout of 75 per cent.
This makes the difference between income and expenditure of the pension fund until 2031 expected to be negative by nearly VND36 trillion (US$1.5 million), according to a report by the State Audit.
According to Huan, in order to reduce the burden on the pension fund as well as society, the development of the microfinance system and personal finance plays an important role. Because if each individual and household can financially prepare for retirement, they will contribute to reducing the burden on the Government and society.
Pham Anh Khoi, General Director of Tulip Real Estate Financial Services Joint Stock Company (FINA), said that focusing on GDP development will not make much sense if individuals and households are not financially secure. Because when these individuals reach retirement age, the financial burden will eventually fall on the Government.
Personal financial development plays an important role in reducing the social burden when the population aging process takes place. And the profession of personal financial planning also plays an important role in the development of this field.
Giving opinions at the seminar, economist Vu Dinh Anh said that personal finance is the final piece of microfinance, one of the goals of developing the National Comprehensive Financial Strategy of the Vietnamese government. However, this is a completely new field and industry in Viet Nam, unlike other industries such as real estate, securities or insurance.
The expert said that in addition to general standards, personal financial planning also needs a set of standards, thereby serving as a measure for activities in the market.
However, Anh also said that the difficulty of the personal finance sector is that there is currently no State agency to manage this area.
Le Long Giang, Chairman of VFCA, said that at present, the field of personal financial planning has developed widely in the world, especially with the birth and development of the Financial Planning Standards Board (FPSB) and Financial Planning Standardisation Boards in 27 member countries.
In Viet Nam, the sector of personal financial planning and consulting is just beginning to develop, but is also facing many problems and obstacles.
There has been a series of cases of financial fraud, including the creation of websites, trading platforms and applications to make money, as well as using decoys offering high profits to entice investment in virtual currency, foreign exchange or appropriation of assets in the fields of finance, securities, investment and corporate bond issuance.
Therefore, Giang said it is necessary to set standards for the field of personal financial planning and consulting in Viet Nam, following international standards and practices.
