Financial Planning / Wealth Management

Planning for life-long financial security

by Ella Lee

Juliana Lam, president, Institute of Financial Planners of Hong Kong

The world of financial planning is changing and an industry event will allow investors to find out the very latest

As financial planning continues to develop in Hong Kong, many changes can be seen. Customer needs are evolving, along with the responsibilities handled by individual financial planning practitioners and the way service providers run their businesses.

According to Juliana Lam, president of the Institute of Financial Planners of Hong Kong (IFPHK), investors have shifted from having a short-term perspective focusing on more immediate rewards to taking a long-term approach towards wealth creation and accumulation, which encompasses their life-long needs. The implementation of the Mandatory Provident Fund Scheme has also made people increasingly aware of the importance of planning for retirement. "They are more conscious about wealth protection and distribution, including estate planning," Ms Lam says.

In her role as head of sales for HSBC, she has seen not just banks but also insurance companies, fund houses and securities brokers getting into the business of financial planning in recent years. The resulting keener competition has caused most leading players to move from a product-based business model to a more comprehensive service-oriented approach that emphasises meeting the unique requirements of each customer.

This has placed new demands on industry professionals, says Ms Lam, and many now realise that obtaining the CFPCM (certified financial planner) qualification is essential to developing a successful career. She explains that the certification process entails rigorous standards and is based on "four Es"-education, examination, experience and ethics. Candidates gain both theoretical and practical knowledge by completing six CFP modules taught by IFPHK-approved educational institutes. After not less than 240 hours of formal training, they sit a two-day, ten-hour exam. On passing that, they must then have at least three years' work experience in the field of financial planning before the CFP designation is confirmed. Non-degree holders require six years' work experience. The final requirement in all cases is to abide by a strict code of professional ethics.

Head start

Ms Lam agrees that becoming a certified financial planner takes dedication and effort. Therefore, to give newcomers to the industry a head start, the IFPHK has developed a new Financial Advisers' International Qualification (FAIQ) together with the Chartered Insurance Institute in the UK. This was launched in Hong Kong last year and involves 80 hours of training in the basic concepts of financial planning and the tools for wealth management. Around 25 per cent of the exam questions apply specifically to the Hong Kong market, giving the qualification both local and international relevance.

Currently, there are over 1,600 CFP certificants and around 700 FAIQ holders in Hong Kong. The two qualifications are increasingly recognised by both employers and clients as a prerequisite for practitioners in the sector.

Ms Lam adds that training to become a financial planner is actually a long-term investment in itself. "It is a sort of general practice in financial services and involves continuous all-round training, which can be even more challenging than what specialists in other areas of finance are expected to undertake," she says.

To create a clearer career path, the IFPHK may introduce an intermediate certificate between the levels of the FAIQ and the CFP. Ms Lam believes it would help to promote overall professional standards and give financial planners an alternative standard to achieve.

Investment education

Besides that, the IFPHK is behind one of Hong Kong's major annual events for the financial services industry. This year, the Financial World Expo will run from 7-9 October and its objective is to educate the investing public and allow major industry players to showcase their products and explain their investment strategies and opinions.

Ms Lam says the event has been extended since last year and is now part of a Financial Planning Week. Selected exhibitors will be invited to take part in phone-in programmes from 3-5 October with financial planning professionals giving investment advice to the general public. On October 6, there will be a special conference for industry practitioners.

Compared to 2004, double the floor space will be used. The number of exhibitors will increase from 54 to over 70 and will include leading banks, insurers, fund and asset managers, and experts in stock broking, estate planning, accounting and legal services. More than 20,000 members of the public are likely to attend, and visitors from the mainland may well boost this number.

Ms Lam points out that it is a challenge to serve customers with an international investment profile, but this also provides financial planners in Hong Kong with a competitive edge. She says that, as a regional financial hub, it is possible to offer investors a complete product range and sophisticated choices. To maintain this advantage, however, practitioners must continue to build up their knowledge of financial management and tax planning in overseas countries.

Responding to needs

  • Hong Kong investors are now taking a longer-term view of their future financial needs
  • The financial planning sector is becoming more competitive with companies offering tailor-made advice for individual clients
  • The CFP and FAIQ qualifications provide different levels of professional training for financial planning practitioners
  • The Financial World Expo event from 7-9 October will allow members of the public to learn about everything happening in the industry

Taken from Career Times 07 October 2005
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