With the global economy showing clear signs of improvement, activity is increasing in the Hong Kong wealth management sector.
"Both the finance sector and its clients have exercised increased caution over the past few months, but the pressure is finally easing," says William Leung, general manager, personal financial services and wealth management, Hang Seng Bank Limited.
As some customers remain uncertain about the implications of the market turmoil on their wealth management choices, they will be seeking investment guidance in anticipation of the economic recovery, creating new opportunities for practitioners, Mr Leung notes.
"Wealth management professionals should pursue every avenue to enhance their professional image, and use their professional strength to reposition themselves for increased demand for their services," he says. "We expect them to raise the bar when it comes to industry standards. Their roles are to enhance their company profiles and refine their client servicing models to the industry's overall benefit."
Hong Kong's wealth management industry is still in its development phase, but it has fast become an important part of the city's financial system, Mr Leung states. "Setbacks are a natural part of the cycle — they can happen in any industry."
Finding the balance
The economic downturn has driven a re-assessment of local wealth management practices. With customers' futures at stake, wealth managers should be attuned to their individual appetites for risk and changing investment needs. According to Mr Leung, increased compliance and enhanced customer relationship management are now focal points for the industry.
"As a major Hong Kong banking institution, Hang Seng Bank exercises maximum caution to ensure that our wealth managers perform to standard and retain our clients' trust. Aside from having the necessary professional know-how, we expect them to also show integrity and responsibility."
While tightened controls do provide some protection for banks, wealth management practitioners and customers, it is ultimately up to the industry itself to set the right balance, he adds, noting that closer internal monitoring has increased the timeframes needed to complete wealth management processes. This, in turn, has placed an increased burden on human resources.
While there is little doubt that the overall image of the Hong Kong wealth management profession was tarnished by the Lehman saga, the damage is not irreversible and the structure of the industry will remain intact.
"There's always room for improvement, though. The industry must work closely with monitoring authorities and professional bodies to adjust and refine the current system," Mr Leung notes.
One such catalyst for positive change is the Hong Kong Institute of Bankers (the HKIB). The institute has in recent years stepped up its promotion of professionalism and integrity in the Hong Kong banking and finance industry through a number of high-profile channels, including the HKIB Outstanding Financial Management Planner Awards, which is now in its fourth year running.
An awards panellist, Mr Leung believes the increased number of participants in this year's competition is a vote of confidence in the industry: "This annual competition provides an ideal platform for participants to earn well-deserved recognition."
Hang Seng Bank is one of the leading institutions to support the HKIB's industry-driven initiatives over the years. It has, for instance, incorporated the HKIB's Certified Financial Management PlannerTM (CFMPTM) programme into its own training schedule.
"The programme curriculum embeds insights from the industry itself. It reflects the true nature of Hong Kong's banking and finance industry, giving participants a full picture of the business environment," Mr Leung remarks.
With economic prospects looking decidedly brighter, he is confident that the industry will continue to attract and develop aspiring professionals.
"There are no boundaries to wealth management and there is plenty of opportunity for further development in Hong Kong. This level of optimism will allow the introduction of more diverse products, helping the industry gain new momentum," Mr Leung concludes.