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Spotlight on professional ethics
Published on Friday, 19 Mar 2010
Winners and guests at the Financial Planner Awards 2009. (From left) Secretary for Financial Services and the Treasury Chan Ka-keung, Convoy Financial Services chief wealth management adviser Perseus Lam, Fortis Insurance (Asia) senior business development executive Jackson Lai, HSBC wealth management manager Edward Yiu, IFPHK president Francine Fu and SCMP editor-in-chief Reg Chua.
Photo: Dickson Lee.
Louis Cheng, chairman of the SCMP/IFPHK Financial Planner Awards task force

The fallout from the economic crisis and its impact on investor-confidence mean that judges for this year's SCMP/IFPHK Financial Planner Awards will have a different focus.

They will still expect to see written submissions and presentations exemplifying the best principles of financial planning. But they will pay special attention to the suitability of advice offered and professional ethics likely to come up in dealings with clients.

"The emphasis has been on having a comprehensive all-round plan covering insurance, investment, estate planning and longer-term strategy," says the awards task-force chairman, Louis Cheng Tsz-wan. "The important thing this year is to see that contestants are definitely putting the client first in terms of the suitability and relevance of advice. Professional ethics are always of the utmost importance, and we want the competition to reflect that."

Cheng, who is also associate professor of finance at Polytechnic University's school of accounting and finance, stresses this does not represent a major change in tack. The judges have always looked for evidence of these principles of financial planning. In this climate, it makes sense to spotlight these areas and give risk analysis a greater weighting. Anyone making it through to the later presentation and interview stages should be ready for questions that go well beyond the immediate scope of their first-round written plan. The panel may ask, for instance, how a client's investments and position will be affected if the financial planner moves to a new company. Or, there could be queries on the rights and wrongs of trying to maximise commission by "pushing" certain types of investment product.

"It may be sporadic, but it is not acceptable as an industry practice," Cheng says. "Financial planners must think more about client needs, not their own commission. They should be able to offer timely advice, explaining how changes in the industry could affect [potential returns] and service for customers, and the need to protect assets and liquidity."

He adds that the basic format for the practitioner category will remain unchanged. Former contestants have praised it as a tough but fair test of overall abilities, which gives entrants from the banking, insurance and independent financial advisory sectors an equal chance to show their skills.

Essentially, round one requires a written plan of no more than 50 pages, based on an actual client case and endorsed by an employer. Those progressing to the second round then present this plan and field questions from the judges. And finalists going through to round three essentially repeat those steps, but dealing with a single hypothetical case which requires very careful analysis and is open to different interpretations.

The student category, though, will see the introduction of a second-round video presentation. "Students are very resourceful, and this will give them a chance to get creative," Cheng says. "They can use multimedia elements, but we don't want to give too many guidelines on how they should do it."

Since the awards are now well established and widely recognised, he feels there are certain benefits from taking part. These include the chance for individual financial planners and their companies to gain wider exposure. There is also an incentive to adopt better professional practices and fill in gaps in knowledge, while researching the written plan and reviewing the chosen client's investment priorities and choices. "Members of the public increasingly look for standard written plans and expect detailed answers," Cheng says. "Providing these help to build trust and will be even more important in future." He notes that with some companies laying on special training and advice sessions, participants have to prepare thoroughly.

"We want to involve as many people as possible, but my advice is don't rush into it," he says. "Take the competition seriously, like preparing for a public exam. Schedule holidays and personal commitments so you have sufficient time and, if necessary, negotiate with your company so you can focus on the awards."

 


Fact file  

  • Initial entries for the practitioner category of the SCMP/IFPHK Financial Planner Awards 2010 must be in on or before May 10. By then, all applicants in the banking, insurance or independent financial advisory categories should submit three hard copies of their written financial plan, a completed application form (website www.ifphk.org), and two recent passport-size photos.
  • The plan should be based on advice given to an actual client, respect the need for confidentiality, and be endorsed by a direct supervisor or relevant manager.
  • Contestants can write their plan in English or Chinese and choose to give their presentation in English or Cantonese. They can also write in one language and present it in the other.

 

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