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Financial Planning / Wealth Management

Cashing in on China's nouveau riche

by Grace Chan

Katty Leigh, first vice president & head of wealth management and consumer loans products
China Construction Bank (Asia) Corporation Limited
Photo: Wallace Chan

Hong Kong lender leverages China parent's muscles to bolster cross-border developments

Closer economic ties between Hong Kong and mainland China constitute an increasing demand for cross-border financial management service from the more experienced Hong Kong bankers.

China Construction Bank (Asia) Corporation Limited is set to make a big push on the mainland by leveraging on the extensive network of its parent there.

The move comes as rising incomes, resulting from China's robust economic growth, fuel a stronger demand for wealth management services.

Katty Leigh, the bank's first vice president and head of wealth management and consumer loans products, says China Construction Bank's Hong Kong operation has completed the necessary preparation for the eventual offer across the border of a wide array of wealth management products and services.

Cross-border business

In Hong Kong, the bank's link with its China-based parent helps win the vote of confidence of customers, especially after the Lehman Brothers "mini-bonds" controversy.

"Other customers come in because of our prominent market presence in China," Ms Leigh says.

Customers are now more cautious in the choice of wealth management products they're putting their money into. The decision making process now takes longer than before. They have also learnt the merit of diversifying their investment risks rather than putting all eggs in one basket.

Ms Leigh notes that investment sentiment has been improving of late, creating new opportunities for the wealth management business.

"This sector offers huge room for growth because of two major reasons," she says. "First of all, Hong Kong's ageing population is a major reason for the growing demand for retirement-related investment products. Secondly, the implementation of the mandatory provident fund (MPF) scheme has generally improved people's financial literacy, enabling them to diversify their investment portfolios from mainly stocks to a broader range of products, such as mutual funds."

Frequent travellers from China to Hong Kong and vice versa are now more attracted to the increasing array of cross-border wealth management products. The bank's cross-border long card, for instance, allows cardholders to manage their finances via its online platform, as well as a vast ATM and POS network on the mainland. The bank's other recent initiatives include its Renminbi credit card and China concierge service.

"With the gradual opening up of China's financial market, Hong Kong will definitely has a key role to play," says Ms Leigh. "Aside from the pilot scheme allowing Renminbi use in settling cross-border trade transactions, some banks recently issued Renminbi-denominated bonds. In the long run, local banks can look forward to more business opportunities."

Ms Leigh says that China Construction Bank (Asia) plans to launch more Renminbi-related products and services as part of its wealth management solutions push while aligning the company's focus on the development of China's financial market.

Raising the standards

Capitalising on emerging market opportunities on both sides of the border will require wealth management professionals to raise their technical expertise and Mandarin language proficiency.

To meet its objectives, the bank has put in place a comprehensive range of in-house training and development programmes aimed at enhancing the professional capabilities of its wealth management staff. These programmes include regular updates on product knowledge and market information as well as a series of workshops.

Ms Leigh says wealth management staff are given regular training on client profile and investment risk management. This move is in line with the bank's stringent risk assessment procedures prior to any product launch.

"They're trained to understand and then explain risks properly to clients," says Ms Leigh.

She adds that although a special division has been set up to serve mainland customers, the number of walk-in clients from China is expanding. To address this issue, training is being expanded to enable staff to meet the special needs and preferences of mainland customers.

Ms Leigh stresses the importance of upgrading the level of professionalism of all wealth management professionals. She says the Hong Kong Institute of Bankers helps the industry in this respect by holding its annual Outstanding Financial Management Planner Awards.

The competition encourages participants to try and outdo each other in their level of professionalism, helping to enhance industry standards.

Ms Leigh, who serves as one of the judges in the competition, says the latest batch of participants generally displayed laudable understanding and expertise in the wealth management industry.

"Although some candidates have only about three years of experience, all of them demonstrated exceptional presentation skills and solid technical know-how with thorough understanding of customers' needs for wealth management services," she says.


 

Taken from Career Times 04 September 2009, p. A5

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