Financial Planning / Wealth Management

Financial consultants make understanding client needs a priority

by Ella Lee

Ivan Lee, personal banking manager, Bank of China (HK) Ltd
Photo: Edde Ngan

Understanding needs is the basis of a comprehensive plan

A good financial consultant must not only help clients to develop investment plans which meet their individual goals, but also be ready with advice on what to revise when changes occur. These may stem from external market conditions or the fact that the client's requirements are no longer as before.

To do this successfully, you can't just expect to follow a standard set of procedures, says Ivan Lee, a personal banking manager with the Bank of China (HK) Ltd. He firmly believes that if you understand the products available and adhere to the principles of the profession, you should be able to adapt and deal with whatever different customers need. The starting point, of course, is to discuss things in detail.

"In some cases the bank already has records from which we can find out, for example, if a person is single or married, has children, owns a home, or has a savings account," Mr Lee explains. "Otherwise, we will have to obtain that information to help the client analyse their likely needs at different stages of life."

Before an initial meeting, Mr Lee says it is essential to prepare as thoroughly as possible. "At first, though, you only have an incomplete picture because the customer may have assets invested elsewhere. Therefore, it is important for financial consultants to explain their own role and services in order to gain trust and confidence before moving to the next stage."

The critical thing is to ask questions in a professional manner. Then by providing the right amount of technical knowledge, a financial planning professional is able to demonstrate an understanding of the market and investment choices without putting any pressure on the client to make a hasty decision.

It is also important to use the right tools when preparing a proposal. For instance, a short questionnaire can be one of the best ways of finding out a client's level of risk tolerance and preferred type of investments. Alternatively, the bank can suggest a model portfolio for individual customers based on their background, income, priorities, and the current market situation.

Whatever the case, any financial plan will take account of monthly cash flow and the need to set something aside for contingencies.

"This information about a family's income and expenditure is sensitive, and some people may be reluctant to disclose it," Mr Lee notes. "Nevertheless, the more information a customer can share, the more comprehensive our proposal will be." He adds that it also helps to learn about a client's previous investment choices and the reasons for them.

In general, Mr Lee has found that, since the implementation of the MPF scheme, people in Hong Kong have become much more attuned to wealth management. "They know more about the products available, as well as their rights as investors," he says. "They also tend to look for more professional analysis and investment advice because they know that consultants, who have a complete picture of the investment market, can help them make higher returns."

He stresses that financial consultants don't just provide added value, but actually try to understand the client's concerns like a friend. This makes it easier to anticipate possible needs for increased medical insurance, an extra life policy, or having to invest more for school fees or retirement, as the client reaches different stages of life.

Mr Lee is a finalist in the Hong Kong Institute of Bankers Outstanding Financial Planner Awards 2006 and is in contention for the grand award for those with less than three years' professional experience.

He says the competition offers a platform for industry practitioners to share experience and has also helped to promote the concept of wealth management among the general public.

By taking part in this competition, he has had an invaluable opportunity to review his own approach to the business and to learn something new during the process. He is sure this will be useful in dealing with real-life cases in future.

Mr Lee is delighted to have made it through to the final round, but says that, for him, the process is more important than the result. Overall, he believes that being observant and having good communication skills are his major strengths and help him to identify client needs and gain their trust.

Creating a financial plan

What kind of information is required about the client?

  • Personal background
  • Financial resources
  • Cash flow, including total income and expenditure
  • Risk tolerance
  • Investment orientation
  • Financial goals
  • Hidden needs
  • Preferred types of product
How to get the information?

  • From bank's database
  • Mainly by discussion
  • Through a questionnaire
  • From previous investment experience
  • By analysis of likely needs
  • From the findings of the bank's research department

Taken from Career Times 27 October 2006
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