Having experienced the effects of the Asian economic crisis and the outbreak of SARS, many people in Hong Kong have become far more aware of the need to preserve wealth and plan carefully in order to achieve certain life goals. They have realised that proper financial planning goes well beyond having a life insurance policy, a savings account and making contributions to the MPF, and have started to take a closer interest in the full range of products available.
Dr Lawrence Tsang, head of Business and IT Studies at Hong Kong Baptist University, explains that financial planning is also a process by means of which a trained expert can help us fulfil our long-term goals. "Nowadays people have greater awareness of their financial situation and there are more investment tools and products available to meet their needs," he says. "For example, people will make use of bank loans to pay their income tax and realise that a sound financial plan is the key to funding their children's education, a comfortable retirement and the other things they want."
Dr Tsang points out that, in response to this, the banking sector is selling more insurance products and providing additional services for high net worth clients. With this extra competition, the local insurance industry has had to upgrade its own services so as to maintain market share.
Therefore, Dr Tsang has collaborated with the Life Underwriters Association of Hong Kong (LUAHK) to offer the Fellow Chartered Financial Practitioner (FChFP) programme which was introduced by the Asia Pacific Financial Services Association (APFinSA) for those who want to begin a financial planning career by working in the insurance field. The qualification is recognised throughout the region, for example in Malaysia and Singapore, and includes eight modules which cover all the major aspects of financial planning, insurance, risk management and tax planning, and retirement planning.
Dr Tsang believes the profession is still developing in Hong Kong. "Take North America as an example, where providing advice is separate from the sales process. Financial planners there offer their expertise to work out the best financial plans in collaboration with their clients, whereas in Hong Kong some financial planners may try to sell products which are less in the interest of their clients."
Even so, he is confident about job prospects in the sector and describes them as "very promising". In particular, he notes the potential of the huge untapped market across the border, which those with the right professional skills will be able to break into. "When you look back 20 years, comparatively few people in Hong Kong bought insurance, but perceptions have changed and it is now regarded more like a necessity," he says. "People in China may not buy much insurance yet, but they will do. This industry will flourish in the future and financial planning will become a highly regarded professional service."