Financial Planning / Wealth Management

Structured approach to identify client needs

by Ella Lee

Ben Sham, personal financial services manager, Bank of China (HK) Ltd
Photo: Edde Ngan

Technical competence and professionalism are the basis for a financial planning career

Two things are essential for any financial planner who hopes to make a good impression on prospective clients — all-round professionalism and technical competence in four key areas.

"A thorough understanding of the investment market is the first of those," says Ben Sham, personal financial services manager at the Bank of China (HK) Ltd. "And that is directly related to one's analytical ability." Third in importance is being able to recommend the right products for customers, which involves knowing the main features, as well as the potential risks and returns of a wide range of financial products.

Finally, it is vital to understand the role of a financial planner and to have the interpersonal skills to perform effectively. This means being able to discuss with clients their investment goals and pinpoint any hidden needs. Only then is it possible to offer constructive advice on managing wealth and to put forward recommendations which will help them build a financially secure future.

In terms of qualifications, a financial consultant must obtain the licences required to offer professional advice on insurance products, the MPF and securities-related investments. These, though, should perhaps be seen as the basic requirements. As Mr Sham is quick to point out, financial planners looking to establish a long-term career should also be considering the Certified Financial Management Planner (CFMP™) designation conferred by the Hong Kong Institute of Bankers (HKIB).

Even though he took a degree in finance and found this gave him a head start in the business, he still emphasises that courses and qualifications tailor-made for the sector are what really make a difference. These may be offered either as part of a company's internal training programme or by a recognised professional body such as the HKIB.

Either way, Mr Sham says the programme should cover the fundamental principles of financial planning, as well as the code of ethics. Subsequently, there should also be regular updates on industry developments, regulatory changes and compliance issues.

"Financial planners should undertake continuous learning to improve their knowledge of different markets and various investment tools," he notes. "They can do this at one level just by reading the newspaper and paying attention to what is happening in the global economy."

He says that by keeping up to date, it has become easier for him to discuss with clients about their needs. Having something topical and interesting to talk about is also a factor in developing better relationships with clients.

While technical knowledge and soft skills provide the foundation for a successful career in financial planning, less experienced consultants sometimes forget the importance of making a good first impression.

"When you present your name card, it gives you a good opportunity to tell the client about your professional qualifications," Mr Sham says. "That can then lead quite naturally to a few comments about your previous experience."

The real test comes when subsequently discussing the client's requirements and detailing the pros and cons of different products. This will form the basis for drafting the financial plan, which should take account of both known and anticipated needs.

According to Mr Sham, there are usually at least three meetings before a plan is agreed. The aim of the first one is to learn more about the customer's background and find out about his or her views and investment preferences. With this information, the consultant then drafts a proposal, explains it in a second meeting, and answers any questions. The details are finalised and the likely risks and benefits are once again explained during the third meeting.

Applying a well-structured approach like this helped Mr Sham reach the final round of the HKIB's Outstanding Financial Planner Awards 2006. He modestly says he was surprised to get so far in the competition and feels that he has learned a lot during the course of the contest. Looking ahead, he believes the experience will certainly stand him in good stead for the next phase of his career.

Key competencies for financial planners

  • Understanding of the investment market
  • Comprehensive product knowledge
  • Strong analytical ability
  • Good communication skills and ability to detect a client's unstated needs
  • Customer service skills for long-term relationship management
  • Three licences necessary to advise on insurance, MPF products and securities
  • Professional qualifications such as the HKIB's CFMP™

Taken from Career Times 27 October 2006
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