Money Moves

Financial planning that covers all bases

By Charles Mak

This is a fortnightly series of articles focusing on the banking and financial industries

Alan Tsang, director and chief executive officer, AMTD Financial Planning Ltd
Photo: Johnny Kwok

While insurance companies and banks have been systematically introducing and promoting their own range of financial planning products and services, individual investors have begun to realise that working with an independent financial adviser (IFA) may, in fact, represent the best option for meeting all their investment objectives.

"The demand for financial advisers is constantly rising," says Alan Tsang, director and chief executive officer of AMTD Financial Planning Ltd. "Nowadays, we don't just look at insurance schemes, saving plans and investment tools as separate products, we also attend to clients' lifelong financial needs."

In Mr Tsang's view, any professional financial planning adviser should be capable of helping clients identify and achieve each of their major investment objectives. He points out that basic market segmentation shows that people under 40 usually concentrate more on short-term investments, such as stocks and warrants, while those with young families have greater interest in medium to long-term products, including retirement funds, home protection and the formation of trusts. In every case it is necessary to weigh up objectives, risks and potential rewards before making a recommendation or decision.

Mr Tsang notes some clients may feel that selecting an appropriate financial portfolio is time-consuming and difficult, but he emphasises that the services and unbiased advice available from an IFA will make the process as painless as possible. "It is important to have a balance of short and long-term investments in a portfolio. Finding the best combination to account for different objectives means that planning is a delicate process," he says. It involves an initial meeting to find out about the client's family status, financial situation, financial planning objectives and willingness to bear risk. Specific needs are then clarified by preparing a computerised analysis which is presented and discussed during the second meeting. Mr Tsang emphasises that service and professional advice are offered but, at this preliminary stage, no products are sold or recommended. "The planning process is the most important thing. Products are only tools and we must first help clients to focus on their financial goals," he says.

As an affiliate of the Cheung Kong and Commonwealth Bank groups, AMTD aims to be the IFA of choice. "The profession should work for the best interests of clients and not push the sales of particular products," Mr Tsang says. "If they have unrealistic expectations about their financial future, we can give advice and mention, for example, that even for short-term financial plans they should be thinking of nothing less than five years. For people who choose certain investment-linked products, it is best to think of a time frame of 15 to 30 years."

He also warns that financial plans should allow a degree of flexibility and that there should be a realistic assessment of the likely returns. To keep clients well briefed, AMTD can provide monthly reports and suggests holding interim or annual meetings to review their plans. "If clients want to make changes, they can also contact us at any time," Mr Tsang says. "The market will keep changing rapidly so, within this industry, we definitely advocate careful planning and regular reviews in order to achieve financial security."

Taken from Career Times 15 July 2005, p. A2
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