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Sun always shines for planners

Published on Friday, 09 Mar 2012
With financial planners in demand, some firms are offering ‘sign on’ fees and other inducements.
Photo: iStockphoto
Katherine Cheung
Stanley Tsang

The recession forced individual investors to rethink all kinds of assumptions about risk, returns, and the relative importance of different wealth management products in their portfolios. In most cases, the necessary adjustments led to reduced expectations and a more cautious outlook, an inevitable consequence of the general economic trauma.

For many investors, though, the changes and uncertainty also brought home the need for sound financial advice. So, while other sectors bore the brunt of the downturn, demand for financial planning professionals continued.

According to Katherine Cheung, director of Noble Apex Wealth, demand for such expertise - and resulting job creation - should remain strong in the months ahead. She points out that banks are activating recruitment plans to boost the wealth management side of their business.

She says insurance companies are ready to offer "signing on" fees as an inducement for sales agents with relevant experience. And some of Hong Kong's larger independent financial advisories impose no upper limit on hiring, so long as they can find good candidates to hire.

As competition intensifies, new factors are becoming apparent, For example, people are more inclined to switch from retail or commercial banking into financial planning, sensing greater job security.

Also, there is a continuing move towards fixed salaries, rather than monthly incomes based on commission payments or incentive schemes. Many take this as a positive sign of a maturing sector, in which professionals are cast - and perceived - as expert advisers, not sales people or "product pushers".

"These days, the majority of candidates prefer to join a reputable international company with an established brand name," says Cheung, whose firm aims to add 100 financial planners this year to its current 130-strong workforce.

Understandably, they also look for a stable work environment, with reliable support, for both themselves and their clients. Investors in Hong Kong are used to starting a financial relationship in a bank or office environment and don't necessarily appreciate the informality of off-site meetings at, say, the local coffee shop.

Cheung hints that employers not set up or structured to meet these parameters may find it relatively tougher to develop their sales teams.

Against this background, there are a number of other trends to watch. "Fewer financial planners will get the SFC [Securities and Future's Commission] licence to conduct pure investment funds business in 2012," Cheung says. "Instead, they may make more use of insurance-related plans when presenting to clients, [assuming they can offer] comprehensive enough proposals."

She notes, too, that the launch of the employee choice arrangement for Mandatory Provident Fund (MPF) accounts will focus extra attention on scheme performance and what best suits individual clients.

With such developments, employers know that good training programmes are paramount. Even the most seasoned practitioners must improve their product knowledge, and professional skills must evolve as client requirements and expectations change.

"Since the financial turmoil, all the regulators have strengthened control procedures and rules for selling wealth management products," Cheung says. "The 'suitability' requirement is not limited to assessing risk, but also concerns the customer's financial circumstances."

She says they ensure staff are trained to provide suitable choices for clients.

Agreeing that the sector must continue to adapt and learn, Stanley Tsang, assistant general manager of Gain Miles Financial Planning Consultants, highlights three key issues.

One is the acceptance and adoption of more stringent compliance requirements. Another is to promote in-depth product knowledge, particularly in the area of yuan-denominated investments, which are comparatively new and, therefore, still unfamiliar. The third is to recognise how the perspectives of Hong Kong- and mainland-based clients may differ, and to structure any advice accordingly. 

There are clear signs that client priorities have changed since the downturn. Now, they are more interested in "straightforward" options and accept the reasons for diversification, says Tsang.

In general, they also see the benefits of a systematic approach to building a portfolio, and are less diverted by hopes of chasing a short-term gain.

"[We aim] to deliver long-term performance [by] riding out different stages of the economic cycle," Tsang says.

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