21 However, there are some leading indicators that point to a modest pick up over coming quarters. For example, job-to-job flows have been increasing (Chart 11) and some surveys of pay growth have picked up more sharply in the last year. Although the relationship between these surveys and average wage growth has become less robust in recent years (Chart 12), they do offer encouraging evidence of better wage prospects for those changing or finding new jobs. Of course, the pay of existing employees needs to pick up as well. After all, what matters for economy-wide inflation is the average wage relative to economy-wide productivity. 22 To that end, we will be closely monitoring pay settlements that are bunched around the turn of the year and taking a steer from the pay of new hires as a potential leading indicator of broader pay pressures. Some observers have discounted the implications for inflation of the recent weakness of pay growth because it stems from the types of jobs being filled – a “compositional effect”. However, these are real jobs being performed by real people, and an increase in lowerskilled lower-wage jobs is one consequence of working-off the labour supply shock. We also  20  See Broadbent (2014). 21  According to the ONS AWE measure, pay excluding bonuses for employees in the economy as a whole was 0.6% higher than a year earlier. Including bonuses, pay growth was –0.2%. In the private sector, the equivalent figures were 0.9% (excluding bonuses) and –0.1% (including bonuses).

With the proliferation of financial products from basic risk protection to more sophisticated financial products for retirement and asset accumulation, it is important for consumers to have access to professional advice to help them work through the wide range of financial solutions which involve increasingly complex structures, and to avail themselves on solutions that will best suit their needs and capacity. For this purpose, Bank Negara Malaysia has introduced the framework for the licensing of financial advisers in 2005 in response to the increasing demand from Malaysian consumers for professional and specialised advisory services to meet their financial needs. The growing affluence and sophistication of consumers have created the demand for more complex financial products and services, specifically insurance products. The introduction of financial advisers, as a new distribution channel for the insurance and takaful industry, will complement the services of the existing professional intermediaries in the financial markets in providing holistic financial advisory services which range from insurance protection, savings for education, investments and retirement planning. In the long term, financial advisory business is only sustainable if its operations are transparent and focused on providing value added services rather than simply selling products. Financial advisers must provide the highest service levels and professional standards in order to sustain and prosper. Apart from the growing appetite of our consumers for more sophisticated products and services, another factor which had prompted the introduction of financial advisers into the financial services sector was the country’s relatively low insurance or takaful penetration rate.