Financial Planning / Wealth Management

Financial planning on the rise

by Ella Lee

Lilian Kwan, managing director, sales and distribution, consumer banking, DBS Bank

Financial planning is providing a range of new job opportunities with good training, a structured career and generous remuneration packages

Wealth management is a major trend in retail banking in Hong Kong with growth being driven both by customer demand and by the new products institutions can offer. Since the economic downturn, people have been faced with low interest rates and been looking for better investment returns by seeking out alternatives to traditional savings and time deposits. They have, therefore, become more conscious of what wealth management can provide and banks, in turn, have employed more focused strategies targeting affluent customers with comprehensive, value-added financial planning services.

In view of the retail banking sector's relative maturity, most banks have been increasing their involvement in financial planning. "Revenue growth from personal financial services has been slowing to only five percent per annum," says Lilian Kwan, managing director of sales and distribution, consumer banking at DBS Bank. "This has made players focus on more profitable businesses such as investment products, which have just over ten percent penetration in Hong Kong, in contrast with about 50 percent in the US."

Today's financial planning services have two major characteristics. The first is personalisation since a financial planner's prime objective is to analyse a customer's needs, identify the risk level they can bear and recommend the most suitable products. "Customers at different stages of their lives may be single or married, have different income levels and different needs and concerns about wealth accumulation or protection," says Ms Kwan. Financial planners are taught to focus always on customer needs rather than products to be promoted or a sales target to be met. "For example, we should never sell a ten-year saving scheme to a 70-year-old customer," she says. "That would be a very serious mistake."

The second characteristic is a wide selection of financial products in a customer's investment or wealth management portfolio. These may include loans, securities, funds, bonds, foreign currencies and insurance policies. Nowadays, as retail banking customers are becoming more sophisticated, structured investment products, which combine traditional deposits with an investment element, are a fast-growing trend. What is most suitable all depends on the customer's short and long-term investment goals and how they can best be covered.

Qualities required

On average, financial planners spend half of their working time in client meetings. It is, therefore, essential for them to have excellent interpersonal and communication skills. "Chinese people and Asians in general are more conservative and unwilling to disclose personal information," notes Ms Kwan. "A successful financial planner must be adept at persuading customers to talk about their needs." For this, good language skills are a definite advantage, says Ms Kwan, who emphasises that all of her department's financial planners can speak English, Cantonese and Putonghua, while some also know other Chinese dialects.

Basic entry requirements for financial planners at DBS Bank are a university degree and one year's work experience, preferably in banking, finance or insurance. Outstanding final-year students, who already possess a professional qualification in financial planning, and, therefore, can demonstrate their commitment to the industry, will also be considered. In addition, candidates should be proactive and self-confident, with a basic knowledge of finance and good understanding of market trends and analysis.

DBS Bank does both individual and group hiring of financial planners. The latter involves two structured recruitment and development programmes for their treasures priority banking and financial planning executives. New recruits are given six months' classroom instruction followed by three months' on-the-job training.

With stricter regulatory requirements, keener competition and faster economic and technological changes, continuous education is essential. In addition to learning about emerging products and taking professional examinations to qualify as certified financial planners, trainees must also keep abreast of market developments. Ongoing training and market briefings can take up to 30 percent of the working week.

Rewarding career

A career in financial planning is rewarding both in monetary terms and in the job satisfaction it brings. Starting salaries at DBS Bank range from HK$15,000-25,000 a month, depending on the experience and ability of individual employees. Performance-related cash incentives are available on a quarterly basis together with generous full-year bonuses. Ms Kwan also points out that real job satisfaction can be obtained from helping customers achieve financial goals that support their personal development and lead to long-term security for themselves and their families.

Unlike in a traditional sales role, financial planners have a clear career path for advancement. It may take just two to three years for someone to move up from entry level to a managerial position overseeing a team. "From there, it is possible to move on as the head of one of our treasures priority banking centres or to become a branch manager or area manager," Ms Kwan says.

But it is not all plain sailing. Financial planners must be ready to deal with challenges, in particular when handling customer complaints and clients who reject their advice or have unrealistic expectations. "Every kind of investment involves risk," reminds Ms Kwan. "When losing money, as happened during the recent economic turmoil, customers tend to blame their financial planners. We must explain the situation and demonstrate perseverance and patience to retain their confidence."

Taken from Career Times 07 May 2004
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