Financial Planning / Wealth Management

Soaring demand for planning services

by Aldric Chau

David Lam, deputy chief executive
Bank of China (Hong Kong) Limited
Photo: Johnson Poon

Banks develop new strategies and invest in nurturing professionals to meet challenges ahead

With the burgeoning of financial planning services in Hong Kong, the banking and finance industry looks rosier than ever.

One expert who is particularly optimistic about the industry's development is David Lam, deputy chief executive of Bank of China (Hong Kong) Limited (BOCHK).

Mr Lam says there are two reasons for his upbeat outlook. Firstly, the number of high net worth individuals (HNWIs) is increasing as a result of the strong global economy, and the fact that people have money to invest leads to greater demand for financial planning services. Secondly, local investors have realised the importance of diversifying their investment portfolios and receiving professional financial advice. "In addition to these factors, the Qualified Domestic Institutional Investor (QDII) policy has significant impact on the market's development," he notes.

Under the QDII policy, financial institutions and mainland residents can entrust Chinese commercial banks to invest in Hong Kong's capital market, generating a capital flow from the mainland to Hong Kong. It is estimated that around US$40 to US$50 billion will be invested in the local market by mid-2008, and up to US$150 billion by 2010.

Competitive edge

Financial planning service providers have adapted to changes in customer needs and market trends through the use of technology. BOCHK has invested in a highly sophisticated financial planning tool, Wealth MaxiWiser, enabling relationship managers to analyse customers' financial needs and risk tolerance before recommending tailor-made services to them.

Besides, BOCHK feels obliged to educate customers on the concept of investment, particularly about the risk and return associated with their portfolios. For the last two consecutive years, the bank has conducted a large-scale BOCHK Investment Expo to educate customers on the importance of financial planning through games and seminars.

As one of the note-issuing banks in Hong Kong, BOCHK has established a strong image of financial strength and trustworthiness. The bank also enjoys great accessibility — it provides customer services through an extensive branch network, internet banking and call centre service. "We are also well known for our team of experienced relationship managers who provide customers with professional advice," Mr Lam emphasises.

"When it comes to customer base, BOCHK has a strong competitive edge, since its parent company, Bank of China, is one of the four largest state-owned commercial banks in mainland China. Mainland customers are therefore familiar with BOCHK and keen to bank with it," he adds.

Important qualities

There are three important requirements for financial planners, Mr Lam stresses. Firstly, they should possess "professional sense", meaning that they should have thorough knowledge of their field and sufficient professional qualifications to be able to give clients the best possible advice.

Financial planners also need a strong "family sense" — they should understand their clients' lifestyles in order to provide tailor-made service to meet their needs. In addition, they should treat customers as "family members", always putting their priorities first. Finally, they should have sufficient "common sense" to be able to communicate with customers with different backgrounds and varied needs.

Nowadays, all financial planners are required to fulfil the "Continuous Professional Training" and "Continued Professional Development Training" requirements as specified by the Securities and Futures Commission and the Office of the Commissioner of Insurance respectively.

"In response to the product development trend in the market, service providers need to help customers choose the most appropriate products. This leads the industry to shift from product-focused to customer-focused, and to provide one-stop financial services to help customers achieve their financial goals through active portfolio management. Therefore, advisory-based wealth management services have proliferated." Mr Lam stresses.

BOCHK has therefore invested a great deal of effort in enhancing the professionalism of its relationship managers. The bank has established the BOCHK Wealth Management Academy, not only to pass on financial knowledge to its relationship managers but to also offer soft skills training and life-style courses such as golf and wine appreciation. These courses aim at broadening the relationship managers' perspectives to better serve clients from all walks of life.

"With the robust development of the industry, more people will tap into the industry," Mr Lam comments, adding that more practitioners are urgently needed to serve the huge number of potential clients.

He expects that banks will provide financial planners with better career prospects and compensation packages in order to attract new talents to the industry. He also believes that greater access to tertiary education and the inclusion of financial planning courses in university curriculums are preparing a sizeable pool of potential newcomers for the industry.


Taken from Career Times 05 October 2007
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