Financial Planning / Wealth Management

Adding value

by Nicolette Wong

Eric Lok
investment consultant
CITIC Bank International Limited
Photo: Edde Ngan
Competent financial planners need more than industry savvy and product knowledge. They must also have the necessary communication skills and compassion in order to develop a deep understanding of their clients' financial situation and ultimate goals.

Building customer relationships is a subtle process, explains Eric Lok, investment consultant, CITIC Bank International Limited.

Since clients often struggle to formulate their financial aspirations and preferences, Mr Lok finds that by initially asking them about their lifestyles he can start to build up a picture of their individual investment objectives. "Information about how they spend their weekends or working hours offers insights into their needs in the long run," he says.

Risk analysis is an indispensable part of structuring an appropriate wealth management plan, since this provides an idea of possible pitfalls and the potential benefits to be gained from particular investments or products. Mr Lok also makes a point of explaining clearly the various options, so as to address clients' concerns and get an even better grasp of their tolerance for risk.

"People tend to answer conservatively when initially questioned, but they may be much more willing to consider some products than others," he notes.

Understandably, past investment results influence customers' choices. It is therefore important to address these during the financial planning process, he adds. "Negative experiences can affect people's perceptions of market trends or certain solutions but once you discuss the matter further, you may discover that they are fundamentally receptive if you recommend the right products."

Full of promise

Effective two-way communication is in every aspect crucial to drawing up a solid, appropriate wealth management plan, and a successful financial planner should help to expand clients' investment horizons according to their preferences and long-term goals, Mr Lok emphasises.

People have varying needs at different stages of their lives, but Mr Lok finds that today's discerning customers are becoming increasingly flexible. "Some of them may remain progressive, even at retirement age. It's all about temperament, financial standing and the amounts involved."

The wealth management process these days is far more transparent and complex than in the past, and most customers keep abreast of local and global market news through online and other means. Mr Lok points out however that some customers may still be unfamiliar with certain kinds of solutions and how their funds are invested. It is the planner's responsibility to explain these issues in a clear and concise manner.

"When we make product recommendations, we consider prevailing market trends, as well as the regulatory environment. Renminbi-linked products, for example, are currently very popular," he says.

Mr Lok, a proud finalist in group B of this year's Hong Kong Institute of Bankers' Outstanding Financial Management Planner Awards, says the competition has given him a new perspective on his work and has opened up new opportunities, including the chance to share industry experience with peers from other financial institutions and to cooperate with his colleagues from different divisions of the bank.

"Taking part in the event has increased my confidence and knowledge repertoire, since it exposed me to different wealth management approaches," Mr Lok reveals. "My colleagues gave me excellent support by sharing their experiences with me and by helping me to fine-tune my proposal for the competition through thorough discussion."

Taken from Career Times 22 October 2010, A7
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