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Money Moves

Weathering the financial storm

by Sophie Leung

Golden opportunities for independent financial advisors amid global turmoil

The ongoing worldwide financial crisis has inevitably dampened investor confidence. Banks and wealth managers are fighting to weather the storm, but one independent financial services company, CASH Frederick Taylor Limited, remains optimistic about its prospects for growth.

"The financial crisis has made our independent status more appealing to investors," says Dennis Wong, managing director — Sales of CASH Frederick Taylor, the financial planning services arm of CASH Financial Services Group. "Our position as a third party enables us to objectively rate and source financial products offered by a range of financial institutions to the benefit of our clients."

Mr Wong stresses that the company's product development department assesses all products, anticipating risks, providing investment managers with weekly market updates and keeping customers updated.

Frontline advisors at CASH Frederick Taylor work in strict compliance with industry regulations and company guidelines. "While our market analysts constantly review product quality, our professional frontline staff act as gatekeepers when it comes to selecting products," Mr Wong notes. "Our advisors must fully acquaint themselves with our clients' financial status, needs and requirements and understand their tolerance for risk, before making any recommendations."

Future prospects

Independent financial advisories (IFAs) such as CASH Frederick Taylor tend to have flexibly structured operation models, which place them in a favourable position to weather financial storms. Large product ranges and diversified portfolios also help reduce risks.

This benefits both investors and advisors, Mr Wong notes. "Since our advisors represent a range of financial institutions on the product front, they are more resistant to falls in the market and more likely to recover from adverse market conditions. As a result, their careers are less vulnerable than if they were linked to one particular firm."

Confident about the future of the IFA sector, CASH Frederick Taylor is currently recruiting in spite of the economic downturn.

Mr Wong advises industry players to ride out the storm. "If advisors stay on through the market's peaks and troughs, they will gain valuable experience and expand their client bases. This may well be tough, but it is a good basis to develop their professional expertise and careers," he says.

Hong Kong has a discretionary approach to regulating financial markets and most products may be sold on the public trading platform, provided all relevant information is fully disclosed. "This regulatory policy is based on the assumption that all investors are rationally able to analyse whether a particular product fits their financial needs. However, with a growing and increasingly complex product range, there is more demand than ever for professional advice to make sensible investment decisions," he adds. "Finance is an indispensable part of life and the industry will always need high-calibre professionals."

Hard lessons

The financial crisis not only creates new business opportunities in the IFA sector, but also teaches some valuable lessons regarding investment attitudes, Mr Wong points out.

"Investors sometimes fail to set themselves clear and reasonable investment goals. They can get confused by cyclical market movements and may subsequently invest funds that are meant for long-term security in short-term stocks. Others end up being forced to leave short-term investments for the longer term to prevent loss," he says.

Immature investment attitudes expose investors to market fluctuations and risk, especially in a global market crisis. "It is therefore important for all investors to make rational decisions based on their own risk tolerance and goals, instead of focusing on short-term market ups and downs," Mr Wong advises. "Finance managers should be realistic about their capabilities and limitations while assisting investors to pursue their goals in a sensible way."

Using an analogy, Mr Wong likens the current market turmoil to bad weather. "We cannot control the rain and the wind, but we can decide how to react to it. Likewise, investors should take this opportunity to review their financial goals and the impact of their wealth on their lives," he concludes.

Key advantages

  • Independent advisors have the flexibility to be objective
  • Diversified product portfolios help reduce risk
  • IFA sector offers room for growth and good career prospects
  • Right attitude crucial to ride out market fluctuations


Taken from Career Times 31 October 2008, p. A4

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