Financial Planning / Wealth Management

Finance industry to experience paradigm shifts

by Billy Chan

Wilson Chan
assistant general manager and chief of investment and product development
Shanghai Commercial Bank
Photo: Lewis Wong
Investors more risk-averse and clued up on long-term wealth management options

Hong Kong's financial planning industry has seen a significant shift in clients' investment attitude since the recent global economic crisis, with many turning their focus from quick returns to less risky options.

Investors these days are also asking more questions of their bankers, a situation that is mutually beneficial and ultimately leads to better asset management, says Wilson Chan, assistant general manager and chief of investment and product development, Shanghai Commercial Bank (SCB).

Rather than merely concentrate on immediate profits, high-net-worth private banking clients now tend to look at longer-term goals. Financial planners therefore need to respond to this and take clients' personal circumstances, backgrounds and aims into consideration when drawing up portfolios.

Just as it would be easier for Canadian nationals to understand the risks of investing in their own country, people with trading experience in Japan would be more familiar with the Japanese markets, says Mr Chan.

"Each investment product has pros and cons and may produce varying results for different people. It's therefore crucial for financial planners to take clients' individual aspirations into account before making any decisions," he adds. "Factors such as age, investing experience, investment objectives, asset amounts, investment horizons and educational levels are all essential in assessing a client's risk appetite."

Win-win relationship

The effort that a financial planner puts into gaining a thorough understanding of clients' financial goals makes all the difference between a competent professional and one that is mediocre, and the ability to see things from the investor's perspective holds the key to long-term results, notes Mr Chan.

A successful client relationship involves a great deal of trust. There have been instances where clients have approached SCB for assistance with issues unrelated to asset management.

In one case, a customer who was sending his children to the US to be educated approached his SCB financial planner for advice on adapting to the American lifestyle. "This demonstrates how much faith some clients have in us," says Mr Chan.

In the aftermath of the financial crisis, investors have become more questioning when consulting financial planners, particularly when it comes to risk and downsides, he stresses. However, this serves to take client relationships forward.

"It's a sign that they've become more financially savvy, which is positive," Mr Chan points out. "Ongoing communication with our customers leads to more fruitful, positive relationships."

Strong growth

Mr Chan predicts that a growing demand for financial planning services will help strengthen the role of planners in the industry. Two major forces driving growth are longer life spans and greater investment in higher education, which are leading to increased awareness of the need for insurance and early retirement planning.

"In days gone by, it was rare for people to live much past 70, but things have changed. However, the fact that people live longer also means they need more resources to sustain their quality of life, and this is why financial planning is more important than ever," he remarks.

Financial planners from SCB will be competing in this year's Outstanding Financial Management Planner Awards run by the Hong Kong Institute of Bankers (HKIB). Now in its fifth year running, the competition engages short-listed candidates in three rounds of assessment, challenging their presentation skills, professionalism and industry knowledge. The first step is to submit written financial planning proposals based on real case studies for review by the judging panel. This is followed by interviews with the judges. Successful candidates then enter the final round, where they are assessed on additional assignments.

The annual awards are helping to raise the bar for the industry and the SCB therefore strongly encourages its staff to participate, Mr Chan says, adding that the bank is also a keen supporter of the HKIB and its Certified Financial Management PlannerTM (CFMPTM) programme.

"Accreditation supports service quality and boosts standards," he says. "It also helps to strengthen our credibility as financial planners, which is the main reason why clients turn to us for assistance."

A step further

  • Investors are turning their focus from quick returns to less risky, longer-term options
  • Asset managers consider clients' aspirations and circumstances before drawing up plans
  • Clients' questioning attitude enhances communication and takes relationships forward
  • Annual industry competitions encourage professional advancement

Taken from Career Times 24 July 2010

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