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.
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.
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.
"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."
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, 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