Financial Planning / Wealth Management

Independent status provides the edge

by Grace Chan

Raymond Cheung
vice president
Altruist Financial Group Limited
Photo: Edde Ngan

One-stop financial services conglomerate helps customers focus on long-term goals

The current credit crunch and global financial crisis do not necessarily leave a negative impression on financial services companies.

Wealth management should be an even distribution of assets with the aim of achieving stable annual returns instead of short-term gains, says Raymond Cheung, vice president, Altruist Financial Group Limited.

To this end, Altruist promotes a professional "financial coach" concept that focuses on generating stable returns. This requires self-discipline when it comes to investment decisions. "A financial coach's role is to guide clients in making consistent and sensible choices," he explains.

In addition to understanding customers' risk appetite and analysing their investment goals, financial coaches need to understand their attitude towards wealth, Mr Cheung adds, stressing that it is not enough to base investment decisions on customers' existing financial portfolios. "Financial coaches also use evaluation tools such as Enneagram to understand the individual characters of their clients," he says.

No bias

Altruist is a one-stop financial services organisation that provides customers with a comprehensive range of products, including insurance and legal services packages, investment funds and consumer banking products referrals.

Most financial planners sell in-house products, but this may not represent the best options for their clients. Since independent financial advisers (IFAs) have the option of selling a wide range of financial products offered by different companies, they take a neutral stance when it comes to product choice. The Securities and Futures Commission (SFC) watchdog also requires IFAs to exercise due diligence on all financial products they sell. "Altruist has a wide range of product choices available from our many business partners. We deliver advice based solely on our customers' needs," Mr Cheung adds.

The structure and nature of financial products are sophisticated and sometimes complex, Mr Cheung states, adding that this proves how important professional knowledge and advice are. "Financial consultants must be independent in terms of the products they recommend in order to provide their clients with the best impartial advice," he says.

Using the current credit crunch as an example, Mr Cheung explains that once Altruist learnt about the sub-prime mortgage loan crisis in the US six months ago, the company immediately exercised due diligence by making sure customers who had financial products invested in sub-prime mortgage loans had a full understanding of the situation.

"Our financial consultants then advised them to sell or reduce the proportion of relevant financial products in their portfolio," he says, emphasising that financial institutions cannot always anticipate investment loss, but that it helps if they can minimise it.

Professional insight

Recent incidents may have left a negative impression on the financial planning industry, mainly because of its sales-driven nature.

Mr Cheung concedes that there are plans afoot for consultation fees to replace commission fees in the industry. "This practice is already popular in Australia and Singapore, where financial planners work on a consultation basis. As a result, their advice isn't biased towards any particular product," he says.

With the aim of achieving sales targets, many insurance companies and financial institutions attempt to recruit bright financial consultants with excellent social skills rather than introverted experts. However, Altruist understands the importance for advisers to have good insight into financial products in terms of their assets allocation, and therefore seeks to employ knowledgeable financial coaches, rather than sales-oriented personnel, he remarks.

Altruist now employs 110 consultants and targets to increase the number to 180 by the end of the year, believing that the industry involves more than just a network of relationships. In a bid to help customers make informed investment choices, the company aims to recruit people who are equipped with sound knowledge and outstanding analytical skills plus the necessary soft skills.

To reach out to potential recruits, the company commenced an internship programme with the School of Professional Education and Executive Development (SPEED) of the Hong Kong Polytechnic University earlier this year.

"We also promote professional knowledge among financial consultants through seminars and media partnerships," Mr Cheung concludes.


Taken from Career Times 24 October 2008, p. A5
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