Abstract
Purpose – This paper studies how economic inertia can make the integration of Robo-advisory services in Malaysia to optimize Faraid (Islamic Inheritance) assets wasteful in terms of wealth creation. It is a response to the systemic crisis of frozen inheritance assets that grew to approximately RM90 billion by 2025, proposing a shift away from passive custodial management to a technology-driven investment model in line with the principle of hifz al-Mal (preservation of wealth) as the Maqasid al-Shariah principle.
Methodology – Adopting an exploratory qualitative design in nature, where a triangulated pool of five experts representing academia, industry practitioners, and regulatory bodies was used. The data were interpreted with the help of the thematic analysis, which was interpreted in the frames of the theoretical approaches to the problem, such as the Technology Acceptance Model (TAM) and the Unified Theory of Acceptance and Use of Technology (UTAUT).
Findings – The results indicate that there is a substantial difference in the stakeholder views. Although there is strong support towards Robo-advisory integration based on six critical demands, such as stringent Shariah cleansing, capital protection on behalf of orphans, and algorithmic integrity, that is the primary regulator exhibits institutional inertia, since it favors traditional internal portfolios. The paper finds that institutional preparedness and perceived risk, and not technological or jurisprudential limits, are the key obstacles to mobilizing frozen wealth.
Practical Implications – This study can offer institutional trustees like Amanah Raya Berhad a strategic roadmap to modernize fiduciary roles. Serviceably, it suggests the alignment of a regulatory sandbox (led by the Securities Commission Malaysia) to pilot the use of Robo-advisory applications, such that the resources put into assets at the service of the interim administration are insulated against an inflationary loss of their effect in the transitional managerial regime.
Originality/Value – The study addresses the gap between classical jurisprudence that has been embraced by Faraid in classical jurisprudence and contemporary Digital Investment Management (DIM). It proposes a new conceptual framework of the frame of conceptualization of wealth retention as a dynamic productive process in the face of the critical interim period of estate management.