Financial Planning / Wealth Management

The only way is up

Professor Han Li Ming, director of business development and professor of the department of finance at the Chinese University of Hong Kong (CUHK)'s Asia-Pacific Institute of Business

Opportunities in financial planning are on the upswing in Hong Kong, as the market is changing and still far from saturation point. Better-educated financial planners and a better-informed general public will both contribute to a change in the structure of financial services

If the number of courses on offer at universities and institutes are anything to go by, interest in studying financial planning is soaring in Hong Kong. However, this training does not only apply to budding financial planners (FPs) but to insurance agents (IAs) eager to make the transition or broaden their skills.

Growing interest

Certainly, Professor Han Li Ming, director of business development and professor of the department of finance at the Chinese University of Hong Kong (CUHK)'s Asia-Pacific Institute of Business, is convinced the future of the industry is positive for both FPs and IAs in possession of a financial planning training.

"I think that, whether you call it financial planning or not, financial planning will have quite an important role in the financial services industry," Prof Han says. "That was the case in the United States and is [now] the case here."

"In general, there should be some growing demand. Financial and insurance products are so very complicated and there are so many of them to choose from. It's hard for the general public to make sense of all these things. Well-educated financial planners will come in handy in explaining product features and the ways to use those products to create and protect wealth," she continues. "I also think that, when [the general public] understands financial planning, they will pay more attention to what products are being offered."

Prof Han believes that this will therefore impact the way in which insurance companies and banks operate in future. "After people are more informed, there will be changes in financial services in terms of products available on the market and the services provided by financial institutions."

And has Hong Kong's troubled economy also affected the level of interest in financial planning? "I think people will become more conscious and more rational about it. You can expect interest to build up very well. And so I think that will be the trend and, maybe, that will increase demand for financial planning. Of course, that also depends on the people who do the job, which is why training is important [so that FPs] are qualified and offer a good service."

A logical transition

So, if someone decides to make the transition from IA to FP or simply decides to broaden their skills-set, just how easy is this? "In financial planning, there are two major elements - one is wealth creation and the other is wealth protection. Insurance is part of wealth protection, so the transition should be quite natural," reassures Prof Han. "Building wealth isn't just about creation. I encourage IAs to see their role in selling insurance as part of financial planning. I also encourage them to enroll in education/training programmes to acquire the necessary knowledge on the 'wealth creation' part of financial planning."

While some IAs choose to enroll in one of Hong Kong's certified public programmes, with an eye to passing the Certified Financial PlannerCM exam, due to time constraints or company requirements others feel more comfortable enrolling in specialised company programmes, says Prof Han. For example, IAs working for Hong Kong insurance company CMG Asia Ltd are currently attending a brand-new, private Executive Programme in Financial Planning, tailor-made in close cooperation with CUHK.

Certainly, CMG's director of sales, Julia Wong, believes that this variety of FP training is helpful for ambitious IAs. "We spent almost one year working with CUHK to design the course content, modules and way of training," she explains.

"The uniqueness of this particular training is that we're trying to ensure it meets both academic and practical needs. We are also trying to use our own CMG financial product, so that we can really make our agents apply what they learned and help them with up-skilling - and therefore give the most professional financial planning advice and expertise to our customers."

Self-development for finance professionals

A brand-new course to feature on the financial planning training scene is the Executive Diploma in Finance Studies, recognised by the Society of Registered Financial Planners (RFP-HK). The course is jointly organised by the Hong Kong Management Association (HKMA), a non-profit-making professional organisation with the mission to improve the effectiveness and efficiency of management in Hong Kong, and the ET Business College - the executive training arm of the Hong Kong Economic Times Group, founded in 1990.

Scheduled to take one and a half years to complete, the first intake of approximately 40 students is to start on 30 July, with an application deadline of 16 July. (For those interested, information seminars will be held on 26 June and 10 July.) The comprehensive course offers a total of 12 modules, ranging from accounting information and decisions to financial information technology and best practices for financial planning.

The HKMA's programme is aimed at in-service executives who possess some background knowledge and experience. "We require applicants who have at least two years of working experience. They should [also] have five passes at HKCEE examination level," says the HKMA's senior marketing manager, Glover Chan.

Why did the HKMA decide to introduce this new course for Hong Kong financial planners? "The financial planning industry is booming and there is a great demand for executives in financial planning and for talent in the industry, so we tried to develop a programme to train up financial planning executives," says Mr Chan. "Because it's the first time, we still need to see the response, but most probably [there will be] two intakes in a year."

"Our programme offers a very comprehensive training in finance investment and planning skills," he explains. "Graduates can also proceed to higher education, such as bachelor's degrees in economics and finance or a master's degree programme. Above all, it equips them with the skills they need to do well in the industry."

And, of course, the programme has other immediate benefits. "[Once they have completed the training], graduates can apply for two module exemptions for the RFP-HK examination," Mr Chan adds.

Taken from Career Times 20 June 2003
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