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Financial Planning / Wealth Management

Creating sustainable business

by Paul St John Mackintosh

Mark Au (left), head of sales; Rodney Chan, head of marketing, Wealth Management Division, Dao Heng Securities Limited

Dao Heng Wealth Management finds that a research-based advisory service focusing on the customers' needs is a key differentiator in wealth management, and recruits staff to match, writes Paul St John Mackintosh

One essential, obvious but often surprisingly difficult aspect of wealth management is to find out what customers want or need and provide them with the right advice at the right time. Some companies make it a key point of their strategy to focus on this. Dao Heng Securities Limited has developed a customer-focused strategy that directs its sales and marketing effort.

Research-based approach

"The most important thing is the customer-centric approach," says Rodney Chan, Head of Marketing in the Wealth Management Division of Dao Heng Securities Limited, a wholly owned subsidiary of the Guoco Group. One of the most common complaints in the wealth management industry is that clients receive poor after-sales service; that is why Dao Heng developed this area into one of their unique strengths. They provide the full range of customer-centric services to their clients: stockbroking, asset management, general insurance, and life insurance. One of their unique strengths is their capacity for research and asset management to provide the right advice. "Our investment in technology and Customer Relationship Management (CRM), and constant contact with the client, create what we see as our unique edge," says Mr Chan.

Dao Heng has two research teams, one for the equity products and one for the mutual fund products. Together with the relationship managers, they use the CRM system to analyze customer profile and then give recommendations. The information on file in the system includes the customer's age, sex, occupation, free assets available, and so on. They segment the customers into different types of investors. For each type, they give specific recommendations. The portfolio will be then monitored by the research team and updated regularly.

"Most companies simply do sales without support from any research operation, but in our company we expect that all our sales staff are supported by input from our in-house research team," remarks Mark Au, Head of Sales in the Wealth Management Division. "For example, in Hong Kong there are many types of monthly investment plans, but not supported by investment advice. In our company, even if a customer has only invested a couple of thousand dollars with us in a monthly savings plan, we still give him or her investment advice. Our aim is to let all our customers earn money from our investment programs."

Selection process

This kind of strategy requires specific types of professionals. "Our sales people are called 'Relationship Managers', and manage a customer's total relationship and portfolio," adds Mr Au. The company's recruitment requirements are a university degree and at least three years experience in the financial services industry. Around 30 per cent of the company's wealth management sales team are Masters-degree holders, and about 20 per cent have the qualifications of Chartered Financial Analyst (CFA) and/or Certified Financial Planner (CFP). Mr Au adds: "We employ a consulting company to do aptitude tests which are very useful for the selection process."

Mr Au explains that the relationship managers must have good face-to-face interpersonal skills, be presentable, have a good manner, and be able to manage the relationship. He says: "We expect that all of our sales teams will be qualified as fully trained financial planners within two years of joining the company. Their qualification training and Continuing Professional Training (CPT) are extensively supported and subsidized."

"We do not expect our sales teams to be able to bring in their own clients from scratch," stresses Mr Chan. "We have a reasonable size quality in-house database. With the help of CRM information, datamining technology and database marketing techniques, the business intelligence unit will identify potential clients and generate leads to support the sales teams to bring in clients."

Standardized methods

Delivering the kind of tailored and highly personalized service that Dao Heng prides itself on requires careful drilling and a uniform approach. "One of the major problems other companies may have is that each individual has his or her own individual way of selling," explains Mr Chan. "We do a very good job of standardizing our sales process according to quite a stringent procedure, with a very strict form of integrated proposal. This includes many things that the sales team has to explain to the clients, including a summary of our services offered to the client, analysis of their needs and current financial position, and an integrated product solution. We have a very disciplined sales force and a very standardized advisory team."

As part of the procedure to standardize the sales process, the company has also developed 'Wealth Optimizer' software in-house. The wealth management teams will use this software to analyze client needs and make sure that the appropriate solution is provided to them. Mr Au says: "This helps most Hong Kong people, as they are too busy to analyze their financial situation and plans in detail. We believe this software can assist them in planning their financial future."

"We want to sustain a customer-centric attitude," Mr Chan concludes. "The remuneration mix is very balanced to make sure that we provide a good mix of services, both at sales and after sales." Mr Au adds: "We have good software and good backroom teams, but we need good relationship managers who can look after the customers' interests. We have to train our people to put the customer first. Only that can make our business sustainable."



Taken from Career Times 13 September 2002

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