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Money Moves


This is a fortnighty series of articles focusing on the banking and financial industries

Changes ahead for charging scheme

by Priscilla Chong

Paul Pong, managing director, Pegasus Fund Managers Limited
Photo: Jacky Chau

In almost every profession, those who reach the top combine knowledge of a wide range of management and business principles with an in-depth understanding of the intricacies of their own specialist field. This certainly holds true for the wealth management sector. As Paul Pong, managing director of Pegasus Fund Managers Limited, points out, a career in wealth management nowadays encompasses aspects of various professions such as accounting, taxation, law and finance, all of which are required to advise individual clients about their personal investment needs.

This expertise is usually confirmed by obtaining accredited professional qualifications to become a certified financial planner (CFP) or chartered financial analyst (CFA). Mr Pong admits that these credentials mainly indicate academic achievement, but says taking the courses and exams that each involves also serves as proof of a candidate's dedication to the industry. He therefore only considers job applicants with these basic qualifications.

"Practitioners in Pegasus normally begin in analyst positions, where they are responsible for providing market updates and analysis for existing clients," he says. However, these skills must go together with the sort of decision-making ability which helps in making recommendations, reducing the portfolio risk and increasing investment returns for clients.

Mr Pong mentions that analysts also need to be self-disciplined and to think independently. These attributes enable them to make forecasts without being too influenced by the current investment climate. If they later become financial consultants, they will not only have to be well informed but also to identify closely with their clients' interests and investment goals.

According to Mr Pong, further changes are on the way within the financial planning sector. "With more financial institutions developing into one-stop service providers, the charging scheme will need greater transparency," he says. In future, he believes, there will be something similar to the medical profession where users can compare charges by item and choose between consulting general practitioners or specialists. A more open charging scheme, which makes it clear how much commission an adviser receives from selling a certain financial product, may even lead to fee-based services being preferred. These would guarantee the adviser an annual fee for managing all the client's needs. Clients would then know exactly what they were paying for and the income of advisers would not depend on having to sell additional products.

Mr Pong, who is an executive committee member of the Institute of Financial Planners of Hong Kong and a graduate of the EMBA programme at the Chinese University of Hong Kong (CUHK), is a firm advocate of continuing professional development. To promote this, Pegasus employees get free training in chart analysis conducted by Bloomberg and subsidies for CFP examinations or EMBA courses run by CUHK. Staff are also encouraged to attend special seminars and lectures by prominent speakers from overseas. These initiatives along with a mentoring programme facilitate career development.

The profession has changed greatly in the last few years and, with so many products now available, no consultant can expect to have the answer to every question at their fingertips. "Even if you are not an expert in a certain area, it's important to know where to turn for best advice to help the client," says Mr Pong. "In this sense, resourcefulness and networking can be as important as product knowledge."


Taken from Career Times 23 September 2005, p. A2

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