Financial planning services take root in Macau

by Charles Mak

Peter Lai, head of Macau branch AXA China Region Insurance Company Limited

Well-established insurance company expands scope of operations

Like most other industries in Hong Kong, the insurance and financial planning sector has been keeping an eye open for any chance to expand within the region.

"There are lots of unexplored opportunities in Macau," says Peter Lai, head of Macau branch, AXA China Region Insurance Company Limited. "For example, there is no mandatory provident fund there yet, so many of the working population have no plan or saving scheme for retirement. We foresee a big demand for our services."

The company has been established in Macau since 1989 and now has 220 agents and 20 other staff serving local clients. The business model has been progressively updated to offer a range of financial planning options and not just the traditional insurance products. Despite steady expansion of the business, career opportunities are still largely confined to Macau residents.

"Hong Kong professionals have to apply for a work permit and the prospective employer needs to prove there is no suitable local with the necessary skills," Mr Lai says. "However, in financial planning, you have to be a local to sit the exams to get a licence, so there is obviously a barrier."

Frontline professionals also rely on having a strong network of contacts, which someone from outside the community will find it harder to build up. "The work is basically the same, but Hong Kong people would clearly be at a disadvantage and have to expect to start from scratch," Mr Lai notes.

He also points out that in Hong Kong, there are 28,000 insurance agents for a population close to seven million; in Macau, there are close to 2,000 agents for 440,000 citizens. "It is a similar ratio, so both markets are quite well covered already," he says.

Skilled managers

However, there is perhaps not an equivalent depth of management skills. Therefore, Hong Kong-trained executives may be assigned to take care of operations in Macau or to oversee both areas.

Mr Lai's own focus is to take business in Macau to the next level. "There has to be a dedicated manager to train the local team," he says. "That can take about two to three years before we feel comfortable handing the team over to local management."

Certain aspects require special attention. "There is huge emphasis on people management within the insurance industry," Mr Lai says. "Good frontline sales requires a great deal of discipline and motivation. We have morning briefings every day and have to use a hands-on style of management, which you can't hope to do by remote control."

Different lifestyle

In Mr Lai's experience, staff in Macau are very loyal to the company and rates of employee turnover tend to be low. Whenever it is considered necessary to transfer a manager from Hong Kong, the person nominated has few problems fitting in.

Business practice and the general lifestyle are very similar and, even if total remuneration is slightly less, the lower cost of living and lower rate of income tax usually balance this out.

Mr Lai says that the thing some people take time to adjust to is the different pace of business. "For example, the IT support and speed of getting things done in Hong Kong is world-class. However, people who work in Macau experience less overall stress, so there is a balance in everything and you must just try to enjoy the change of pace while you're there," he says.

Management openings

  • Growing demand for insurance and financial planning services in Macau
  • Financial planners in junior roles require professional qualifications obtained locally
  • Lack of experienced managers open doors for experienced executives
  • Stable workforce means there are low rates of employee turnover

Taken from Career Times 26 May 2006
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