Financial Planning / Wealth Management

High-profile awards a boost for private banking professionals

by Grace Chan

Considering the increasingly sophisticated nature of Hong Kong's wealth management industry and the new, tougher regulations governing the sector, the Hong Kong Institute of Bankers this year introduced a third competition category to its annual Outstanding Financial Management Planner Awards. The new addition, which focuses on planning for high net worth clients—customers with "investable" assets of more than US$1 million (excluding primary residence owned) at a financial institution, will complement the existing categories for financial planners with three years' experience or more and for planning professionals with less than three years' experience serving "general wealth management customers". The judges for the new category gathered last week to assess contestants' performances in the second round.

Amy Chan
assistant vice president & head of agency talent development department, American International Assurance Company (Bermuda) Limited
Professional credentials

This year's candidates for the HKIB Awards are the finest examples of growing professionalism in the wider financial management industry in Hong Kong, notes Amy Chan, Assistant Vice President & Head of Agency Talent Development Department, American International Assurance Company (Bermuda) Limited.

"During the second round assessment, candidates in the high net worth customer group were able to demonstrate excellent credentials alongside superlative customer service skills and a positive mindset," Ms Chan adds. "In particular, they showed the judging panel a thorough understanding of the unique financial positions, financial management aspirations and planning needs of this customer segment."

In her opinions, high net worth customers are savvier and knowledgeable, and they demand differently to general customers. "These customers are typically quick to respond to changing market sentiments so planners must be able to stay ahead of the game in order to gain their customers' trust as well as credibility in this fast-paced industry," she emphasises.

Ms Chan believes that the HKIB Awards has over the past five years built an ideal platform for idea exchange among financial practitioners regardless of their experience in the field. "Everyone involved reaps the benefits," she remarks. "As the industry grows in sophistication, this annual event will only gain popularity."

Despite the tougher regulatory environment, the financial planning industry in Hong Kong continues to boom with optimism and prospects, and an increasing number of budding individuals are looking to make a mark. Ms Chan reveals however that financial institutions across the board will impose strict talent acquisition guidelines as a means to ensure quality.

"Companies may find it comparatively easy to tap into the current high-volume, high-quality banking talent supply but from the demand side perspective, the search for professional talent that have the right competence and flair remains an ongoing challenge," Ms Chan observes.

Catherine Cheung
head of investment strategy & research;
vice president wealth management, Global Consumer Group
Citibank (Hong Kong) Limited
Higher expectations

The recent global financial crisis changed the face of the wealth management industry, says Catherine Cheung, head of investment strategy & research; vice president, wealth management, Global Consumer Group, Citibank (Hong Kong) Limited.

"In spite of the current low-interest environment, an increasing number of high net worth private banking customers are now turning their focus from high returns and high-risk products to stable returns and longer-term options," she notes, adding that clients that belong to this affluent segment generally have considerable investment experience and are more financially savvy.

"Merely putting together a portfolio of funds, bonds or insurance products is not enough. To serve high net worth clients, bankers will need to cater for their financial needs. Private bankers wanting to succeed in this sector must take a more holistic approach to wealth management," she advises.

Experienced financial planners must cultivate a thorough understanding of high net worth customers' financial status, their diverse requirements and investment appetite in order to draw up appropriate financial solutions that reflect their tolerance for risk and meet their long-term goals.

"They must also keep track of the clients' changing needs and review their portfolios regularly," Ms Cheung says. "Effective communication skills are essential to this and to fostering ongoing and trusting client relations."

As a member of the panel judging this year's candidates in the new high net worth customer category, Ms Cheung has been impressed with the clear and comprehensive financial proposals submitted by contestants.

"Given the scope and scale of today's wealth management and high net worth customers' specific needs, we do expect a higher level of professionalism from participants in this category," she points out.

Edward Chow
managing director
head, Hong Kong market
Bank of Singapore

New benchmarks

In its fifth year running, the HKIB Outstanding Financial Management Planner Awards is widely regarded as a valuable platform for banks and other financial institutions to promote industry best practices and professionalism.

The new entry category focusing on high net worth customers can help increase awareness of the bourgeoning private banking sector and bolster its development, says Edward Chow, managing director, head, Hong Kong market, Bank of Singapore. "Client segmentation is most important when it comes to wealth management," he adds.

In view of the growing numbers of ultra-wealthy customers, financial institutions are extending their retail banking offerings to cater specifically to this group of clients. "Although most priority banking relationship managers who wish to move into private banking are already well equipped to assist their customers with their wealth management requirements, they will not rest on their laurels. Rather, they take ownership to their future development, seeking additional training and exposure to meet their clients' complicated needs especially in terms of investment," Mr Chow points out.

He believes the new award category not only promotes a better understanding of the private banking business, but also drives the knowledge, professionalism and expertise that are required of relationship managers for becoming fully fledged private bankers.

"Most participants have managed to follow a meticulous and systematic approach to planning recommendations, while at the same time demonstrating exceptional technical expertise and communication skills," he reveals.

However, Mr Chow would like to see more personal touches by the participants to create added value for their customers. He notes also that there are still many untapped areas in retail banking waiting to be explored.

Having worked as a private banker for the past 22 years, Mr Chow has seen ongoing transformation in the wealth management sector. "In order to go the extra mile and push industry standards to the next level, practitioners should always endeavour to enhance their professional qualifications and accreditation," he stresses.

Rosita Lee
assistant general manager
head of private banking and trust services
Hang Seng Bank Limited

Professional advancement

Participants in this year's HKIB competition have demonstrated strong professionalism—particularly the superb communication skills that are vital for establishing trusting client relationships, according to Rosita Lee, assistant general manager, head of private banking and trust services, Hang Seng Bank Limited.

"Those that really stood out from the second round assessment also showed superior analytical abilities and excellent presentation skills," says Ms Lee. "They displayed not only strong technical competence, but also an ability to understand their clients' implicit needs and lifestyle goals. Most of the written proposals and presentations were so well prepared that the candidates' professional standard was beyond question."

When compared with regular retail banking clients, affluent customers tend to have different expectations regarding wealth management solutions, Ms Lee points out.

"High net worth customers are more concerned with wealth preservation than accumulation. In addition, they may need professional advice on inheritance and succession arrangements," she remarks.

The challenge for private bankers is therefore to offer their clients a greater portfolio of personalised wealth management services, rather than merely standard products.

"Considering the relatively short history of private banking in Hong Kong, many top financial planners in retail banking are moving into private banking roles. It is therefore important that they pursue opportunities for ongoing education and continue to upgrade their skills in an effort to exceed their clients' expectations," Ms Lee stresses.

Since its inception in 2006, the HKIB awards have provided an excellent platform for raising industry standards in Hong Kong. "The new category focusing on high net worth customers introduced this year will help to increase public awareness and set new benchmark standards in serving this select group of people who have highly diverse and specialist wealth management needs. The competition is helping to push professional abilities and standards to new heights, to the lasting benefit of contestants and their employers," she adds.

Simon Lee
head, investment advisor division
Bank of China
Private Banking (Macau)
Constructive advice

Rather than simply sell products off the shelf, private bankers have a duty to provide personalised advice to their high net worth clients, including warning them against unwise investments. This is the view of Simon Lee, head, investment advisor division, Bank of China Private Banking (Macau). "That's what differentiates a private banker from a mere salesperson," Mr Lee adds.

Comparing private banking services with a doctor's prescription, Mr Lee points out that medical professionals' credibility is linked to the expert health advice that they dispense. "Similarly, it's crucial for wealth management professionals to protect their clients' best interests and not to be product-driven," he emphasises.

Private banking customers expect a superlative level of service and in addition to ensuring wealth protection and good returns on investment, planning professionals should attend fully to their customers' every need.

"By doing this, bankers can build long-term, trusting relationship with their clients, as well as foster friendships with them," he remarks.

Mr Lee has been impressed with the financial knowledge and presentation skills that round two contestants of the HKIB competition demonstrated. "They are all experienced financial planners who take into consideration of their clients' financial situations, goals and appetite for risk before drawing up financial plans," he explains.

As more high net worth individuals emerge in the region, wealth management services will progress to the next level, Mr Lee believes. He emphasises that an important quality for private bankers is the ability to add a personal touch to their dealings with their affluent clients. This is indispensible for gaining their trust in the long run and providing the service they expect.

"Wealth management professionals should continue to upgrade their skills and do their best to gain insight into their customers' lifestyles to ensure that they're speaking the same language," he advises.

Michelle Yam
enior vice president
Hong Kong Branch
Trusting relationships

Michelle Yam, senior vice president, EFG Bank AG, Hong Kong Branch, has been on the judging panel of the HKIB Outstanding Financial Management Planner Awards since its second year and has noted a continuous improvement in the quality of entrants.

"Participants in the new category have exhibited the highest level of professionalism, indicating that they understand the importance of building trust and respecting customers' wealth management concerns, particularly with regard to risk exposure and family protection," says Ms Yam.

Pointing out that private banking constitutes more than just offering a selection of investment product options, Ms Yam says she was struck by the fact that most participants were able to demonstrate their all-round knowledge and skills as encompassed by the TRUST assessment model—an acronym that stands for trusting relationship, recognising financial goals, understanding financial status, structuring a financial plan that meets the goals, and timely management of the financial plan.

Banks and finance houses play a key role in supporting their private bankers with a wide range of solutions and specialist advice, so that they are equipped to cater for their affluent clients' needs and goals, she notes.

Most importantly, private banking involves more than just the role of financial partner of the clients on investment decisions, but requires long-term trust built on a strong client-banker relationship. Considering affluent customers' growing need for assistance with inheritance and succession arrangements, it is essential that private bankers put in a concerted effort to nurture ties with their clients and their immediate family members.

Ms Yam believes it is important for wealth management professionals to obtain qualifications such as the HKIB's Certified Financial Management PlannerTM (CFMPTM) designation, as a way of expanding their profession knowledge and skills. "This accreditation serves to strengthen practitioners' credibility in the field," she concludes.

Taken from Career Times 27 August 2010, A4

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