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It’s all about what clients need

Published on Friday, 12 Aug 2011
Kay Patterson says clients must be involved.
Photo: Berton Chang

Financial advisors must understand what their clients need, what they want to achieve in the long term and what they can afford.

"It should never be just a sales pitch. It's about knowing where your clients are, where they want to be, and how they can get there. Good financial advisors will know how to bridge the gap between needs and goals," says Kay Patterson, head of quality assurance of Integrity Financial Advice Network, a member of the AXA Group.

"And clients should not just be passengers. They should be closely involved throughout the entire journey," Patterson says.

In this way both sides can avoid misunderstanding if an investment goes bad one day.

"I have seen financial advisors who refused to pick up the phone to explain things to clients after the market crashed because they didn't know what to tell them at that juncture. They wouldn't need to do that if they had done their job properly in the first place," she says.

No matter what product financial advisors are selling - be it an MPF fund or insurance savings plan - the broad principles are the same - plan, do and review, according to Patterson.

She says they have to plan it and explain it well to clients, see whether it is achievable and carry it out properly. Then they should revisit the whole thing to check on its progress. Another important aspect of the training for financial advisors and wealth management professionals is to make sure that they do everything according to best practices, with clients' interests taking precedence at all times. So it all comes down to integrity, she says.

"There is a wide range of financial products available in the market. Hence, financial and wealth management firms must educate their customers about their actual needs and the affordability [of the products offered to them.] A long-term investment is not just about looking at the returns. Knowing the details is also very important. We need to engage customers and help them make informed decisions," Patterson adds.

To be able to do this, financial and wealth management firms must first educate their advisors. According to Patterson, some of these firms promote their advisors to managerial level without giving them proper training. They are often promoted simply because they have reached a certain sales target. She says this approach has undermined the professional standards developed by the industry in recent years.

"At the end of the day, it should be all about what clients need, and advisors have to make sure that they need it, like it and can afford it," she adds.

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