Like other financial sectors, Hong Kong's private banking industry is far from immune to the rising costs and regulatory pressures that are reshaping the financial markets. At the same time, clients, many of whom are self-made millionaires, increasingly expect a lot more than investment advice from their private banks.
Kaven Leung, deputy region head for Asia-Pacific at private bank Julius Baer, says that not only has the private banking landscape changed significantly in the six years since the global financial crisis, the needs of clients have also evolved.
"In this 'new world' of private banking, clients are looking beyond performance and competitive pricing and expect their private banks to provide them with value-added advice and services," says Leung, who has worked in the sector for more than 26 years. "The relationships clients are looking for need to be based on trust."
Clients are looking for a holistic approach that not only takes into account managing an investment portfolio, but also helps with succession planning. They must be sure that their private bank relationship managers have the experience, mindset and perception to fulfil their needs, as well as the support and capabilities of the banks they work for. This includes having an in-house team capable of providing wealth and tax planning orchestrated by a relationship manager.
Making the point that private bankers can't be trained overnight, Leung says the majority of professionals at Julius Baer have more than 20 years of experience and have worked through the ups and downs of several economic cycles. They are able to apply the principles based on the tradition and experience of managing "old wealth" in Europe to the needs of Asian clients who have relatively new wealth
According to forecasts by wealth intelligence firm Wealth-X, the combined assets of Asia's wealthy are expected to surpass Europe's by 2020. As the number of high- and ultra-high-net-worth individuals rapidly increases in Asia, the demand for private bankers with this sort of experience is outstripping supply.
Enid Yip, Asia chief executive of Bank J. Safra Sarasin, says there will never be enough high-level private bankers. She stresses, however, that it is more the quality than quantity that matters.
"A great private banker must have the ability to win and inspire trust," Yip says. All the diplomas in the world mean nothing without trust, she adds, which is fostered through genuine listening.
A private banker has to also have a complete understanding of the client and their goals. "Private banking is about aspirations," Yip says. "It is our job to understand those aspirations and to have the passion to succeed in helping our clients to achieve them. It takes all of these skills, and financial expertise, to be a top performer."
Yip says that the aim of most senior private bankers is to be in a strong partnership with a bank of good reputation, strong financials and a solid platform. "They want to be with a bank that has a deep commitment to clients in Asia," she says. "If they are with a bank with these qualities, they can sleep well."
While Hong Kong and Singapore are competing to be regarded as Asia's private banking hub, Yip says private bankers don't need to think about hubs. "Hubs are for management," she says. "For a private banker, the hub is always the client, who is at the centre of his or her thoughts."
Dr Henri Leimer, chairman and chief executive officer of LGT Private Banking, says that while investment trends come and go, LGT prefers to focus on the long-term needs and goals of clients. The bank, which is owned by the Liechtenstein royal family, began as a family office for the princely House of Liechtenstein, which remains one of the LGT's biggest clients. "We listen to what our clients want and tailor a solution for that," he says.
For example, as clients' lives become more complicated, there is a need for more complex wealth planning and investment solutions. This calls for bankers with increasingly specialised skills.
"Twenty years ago, very few banks had structuring experts in-house," Leimer says. Today, however, you would be hard pressed to find a major institution without a team of dedicated private client lawyers and accountants, he says.
"We are always on the lookout for potential new hires who have unique or specialised skills that could add value to our client offering," he adds.
Leimer believe that a good private banker is usually a good listener who takes the time to understand what his or her client wants. It also helps to have an entrepreneurial spirit and a strong instinct for business.
"Since we are often serving not one person, but multiple generations of families, a good private banker should be able to think in the present and to also anticipate longer-term client needs," he says.
Milk Design founder Lee Chi-Wing has built his business on a simple philosophy, writes Wong Yat-hei.
What connects a calcium-rich beverage with the design of consumer goods? The answer is obvious to Lee Chi-wing who, in 1998, established his own design house, Milk Design, with the aim of creating products that were both simple and human. "I think design needs to be closely connected to our living condition - just like milk," he says. "My design concept is creating products that make people comfortable. A successful product is one that makes people's lives better through creativity."
Lee's passion for product design was cultivated from an early age. Both his father and grandfather were professional sculptors, and the young Lee would watch them as they worked. "That inspired my interest in, and sensitivity towards, three-dimensional objects, and later my passion for product design," he says.
Growing up in Hong Kong, Lee graduated from Polytechnic University before going to Paris to further his design education. "The school in Paris provided a very liberal place to learn. There was no concept of what classes you had to take because you belonged to a certain year. Students in year one, two and three attended classes together, depending on their interests. My creativity was inspired through such a liberal learning environment."
After returning to Hong Kong, Lee started worked for a multinational company, but was soon told the company planned to transfer him to the US. "I was reluctant to go because I was just back home from Europe. So instead I started my own business, as there were some clients that said they would support me if I opened my own design house."
Lee steadily built his reputation as a product designer for several years, after which is began to think about creating his own brand. In 2002 he launched Feelgood, a lifestyle brand that sells bathroom products and fragrances online.
"It's a designer's dream to have his or her own brand," he says. "We can have total control over what we want to do. I want my brand to be closely related to life; I focus on making bathroom products because the bathroom is a personal space for one to relax in."
Hong Kong is a mature market with sophisticated consumers, Lee says, but he wishes consumers had a deeper understanding of design. "The media promotes many designers' products as trendy items, and consumers love them because it is hip to own such products.
"This is perfectly fine, but I think more should be done to let consumers understand a product's design concept and the thinking processes behind it. More resources to educate the public on design concepts will open the minds of consumers and provide the basis for designers to create more innovative products."
Although Hong Kong produces many designers, Lee does not see product design as a popular choice for students. He predicts this will change as more local businesses move to build their own brands and no longer focus on manufacturing.
"I think this development is in line with the development of our economy. Hong Kong does not have a very long history of producing original products, but that is changing. More companies are looking for original design, and the demand for product designers will go up," he says.
The challenge for the industry, he says, is for it to develop its own identity. "Local designers have many brilliant ideas, but we have not yet developed our own identity. Fortunately, many young designers are aware of this situation and are eager to include local elements in their work. [However], Hong Kong people think highly of imported goods. This is a mindset that cannot be easily changed, but we are ready to prove them wrong."
Lee, too, embraces the chance to promote local culture when he can.
"My favourite project [I have done] was the plastic in-flight tableware I designed for Cathay Pacific," he says. "I applied a semi-transparent rice pattern on porcelain bowls. I was delighted to work on a project that allowed me to bring local culture to the rest of the world."
Lee says he is currently designing tea utensils for a local homeware brand. "Chinese tea is world famous, but because of the hectic pace people live at today, making a cup of Chinese tea the traditional way has become a luxury few can afford. My work will focus on designing tea utensils that are simple to use. Modernising traditional culture is a design concept that I love," he says.
Lee says listening to clients is essential when working on commercial design projects. "Every designer has ideas of their own, but they should not forget that their design is to serve the basic needs of people. Designers have innovative minds, but not everyone is as open-minded as a designer. Communication with clients is very important, especially for young designers."
Demand for experts in leasing and selling aircraft set to boom as passengers proliferate in Asia, writes Wong Yat-hei.
While air traffic has grown steadily on a global scale since the financial crisis, in Asia it is rising much faster. According to a report released last year by aviation technology company Amadeus, air traffic in Asia rose 9 per cent in Asia from 2011 to 2012 – higher than any other region. The figure was buoyed by the region’s developing economies such as Indonesia, where air traffic grew 22 per cent, the Philippines (14 per cent) and China (10 per cent).
Despite improving infrastructure and better service, one sector of the industry that remains largely undeveloped in Asia is aircraft financing. Long the stronghold of Western banks and specialist firms, the sector has traditionally been small in the region. In recent years, however, this has begun to change as businesses see Asia’s air travel potential. In turn, this has led to greater demand for finance professionals skilled in the area of buying and leasing aircraft.
China Aircraft Leasing Group (CALC) was set up in 2006 by Hong Kong entrepreneur Mike Poon Ho-man to compete with Western aircraft financing companies in Asia. “He decided to start the business because he was disappointed by the fact that, of all the planes in the air, none belonged to Chinese people,” says Winnie Liu Wan-ting, senior vice-president and executive director of CALC.
She says aircraft financing is a new sector, not only in Hong Kong, but in Asia. “We are one of the first firms in Asia to get involved in aircraft leasing. Our business is fast-growing – we bought our first five planes in 2008 and since then we have aggressively expanded our fleet. We own 40 aircraft and plan to have 64 by 2016. And we listed on the Hong Kong stock exchange in July.”
CALC is capitalising on the surge of new airlines in Asia. “The mainland is one of the fastest-growing markets for air travel,” Liu says. “The number of passengers on the mainland grew from about 88 million in 2003 to more than 354 million in 2013. The US had 17.3 passenger aircraft per one million people last year, compared to 1.5 per million on the mainland.
“The potential for the aircraft leasing market is undeniable; the mainland will need more planes in the future,” Liu says.
Many airlines look to rent rather than buy aircraft. “Airlines want to focus on providing services. Many have chosen to rent planes rather than running a fleet on their own, providing lots of opportunities for aircraft finance companies,” Liu says.
However, it is not easy to recruit aviation finance professionals in Hong Kong because it is such a new sector.
“Work in aviation financing is demanding because we have to deal with many stakeholders and complicated situations. People who are interested in joining the industry should expect to learn a lot about aviation,” Liu says.
Many skills used in the finance industry, such as analytical and risk management proficiency, are in demand in aircraft financing, but having the knowledge alone is not enough.
“We are looking to recruit people with the right attitude, rather than those with a relevant skill set,” Liu says. “Many financial skills are transferable, but most aviation-related knowledge needs to be learned on the job. The key to success is having an open mind and being innovative.
“We are a new industry that is growing rapidly – one needs to be able to adapt to changes quickly to thrive. The financial products we create for clients are extremely flexible and we take pride in thinking out of the box to tailor-make products that best suit our clients.”
A plane can be in service for more than 30 years and aviation finance can help get the most out of it throughout this period. “There are a lot of things we can do with planes financially, like issuing bonds and financing. There is also a very active second-hand market for planes and plane parts,” Liu says.
There are a number of stakeholders to work with, so it is important to be a willing learner and a strong communicator. “Starting with purchasing and leasing planes, we need to deal with plane manufacturers and airlines. The manufacturers are Western companies and most of the airlines we serve are from the mainland, so one needs to be aware of the cultural differences,” Liu says.
“Tax and legal are complicated issues in trading planes. Fleet planning is another mind-boggler. Planes take at least a year to produce and we need to forecast the demand for planes a few years in advance.”
As most of CALC’s clients are mainland airlines, the company also maintains close contact with the government, lobbying them to put forward tax polices that are friendly to the trading of planes. It also works with an engineering team, which checks the condition of planes when they are delivered from the manufacturer and when airlines return them.
As is it difficult to find people with experience in the industry, CALC has a proactive approach to training. “Our aim is to nurture our own talent. We describe our company as a Shaolin temple that trains talent in aviation finance. We host seminars regularly to let more people know about the industry. People working in banks, financial institutions and airlines are our main targets.”
She adds that going forward, the local aircraft finance sector needs to expand its services outside of buying and leasing planes. “The bigger goal for us is to provide aircraft finance solutions to airlines. For example, we recently helped a client to enhance its fleet with new planes and by getting the most out of three old aircraft it no longer wanted to fly. We add value to our services, on top of renting planes.”
Hong Kong has the potential to be an aircraft leasing hub with rich talent in the financial sector and an extremely active air travel market, she says. “The Hong Kong government has been in discussions with us about developing the city into an aircraft leasing hub. That is still a work in progress, but I believe it can be achieved.” she says.
Con Korfiatis, partner in Heidrick & Struggles’ Singapore industrial practice and an aviation specialist, says that the growing number of new airlines adds to the demand for financing. “In the past, airlines liked to take ownership of their aircraft,” Korfiatis says. “Nowadays, all airlines, including start-up airlines, are focused on moving away from capital-intensive aircraft ownership to a financing model.”
He says major growth in the market in the next 20 years will boost the aviation finance industry. “There are so many new airlines, as well as existing airlines placing large orders for aircraft. Globally, there are a lot of specialist aviation financing companies and aviation business units in banks looking for talent in the sector.
“An aircraft is an asset, so people with experience in asset management will be in demand. Knowledge of risk management is also important as finance companies need to be able to identify trustworthy clients.”
Engineers are also in demand. “Aircraft leasing companies value engineers who can ensure their aircraft are being well looked after by the customers and to prepare the aircraft for customers,” he says.
Our CEO Sunny Kok being awarded the East Asia Digital Content Winner by Talent Unleashed Award.
Mobile Apps Development
GreenTomato plays a pivotal role in the mobile revolution, we have a mission. Be it a client project or R&D endeavor, we advocate sustainable creativity; we leverage, instead of being enslaved by mobile technology because innovation is more than eye candy, only through this pursuit could we deliver everyday essentials.
Our CEO, Sunny Kok, was invited to be the Guest Speaker for the Hong Kong University Alumni Association (HKUAA) Entrepreneurship Talk on 27 July to share his experience on his entrepreneurship story to students and alumni in the University of Hong Kong (HKU).
Hong Kong University Alumni Association, established in 1920s with over 20,000 members, is the largest alumni body in HKU. We organized different talks in the past to promote entrepreneurship, and invited speakers such as founders / CEOs of HKTV, Cathay Pacific, Commercial Press, 759, GoGoVan and Taxiwise.
Mobile Apps Development
GreenTomato plays a pivotal role in the mobile revolution, we have a mission. Be it a client project or R&D endeavor, we advocate sustainable creativity; we leverage, instead of being enslaved by mobile technology because innovation is more than eye candy, only through this pursuit could we deliver everyday essentials.
Jeremy Andrulis is getting ready to find solutions for more clients in fresh markets as Aon Hewitt’s new CEO of Southeast Asia, writes John Cremer.
Moving to a new role in Singapore after 11 years in Hong Kong, Jeremy Andrulis takes with him the wisdom accumulated during a fast-track career and the ambition to keep breaking new ground. The main challenge awaiting him as CEO of Southeast Asia for Aon Hewitt Consulting is to build the company’s client base in established markets, venture further into Vietnam, Myanmar and the Philippines and, where possible, take the business in new directions.
“For both the emerging and mature markets, the aim is to look at the corporate landscape and what it presents and then to focus on clients and what they need,” says Andrulis, who as managing director for Hong Kong and Taiwan led the firm’s performance, retirement, rewards and talent practices. “The move dovetails with the personal as well. Everyone has to take risks in their life, and what drives me is to take opportunities when presented – in this case, to grow the business in a ‘green field’ space and to help the company expand.”
When Andrulis first came to Hong Kong to join IBM’s Hong Kong operation, it was even more of a leap in the dark – and one made despite all kinds of reasoned advice. At the time, he was making strides as a Chicago-based consultant with IBM, helping big-name clients resolve management and transformational issues arising from new IT strategies and work practices.
“People said there would be more sophisticated clients in the US,” Andrulis says. “Like any decision, it was a mixture of the professional and the personal. I saw it as an opportunity and a calculated risk, but I had a keen interest in exploring different parts of the world and the feeling that sometimes you have to put yourself on the line. I didn’t want to look back on my life at 65 and see all the things I hadn’t done.”
Consultancy has always held its attraction for Andrulis, who opted for that sector on leaving Purdue University, in the US state of Indiana, with an MBA and an MA in political science. For him, the work, methods and objectives appeal on many levels. He likes pushing the envelope to find solutions for clients. He likes the need to always be one step ahead. Lately, he has also had the additional aspects of managing a P&L, day-to-day operations, the corporate sales effort, and the impact of constant change. “You are using your left and right brain,” he says. “No two days and no two clients are the same.”
While academic training provided a solid foundation, on-the-job experience was invaluable. At first, it came from listening to more senior colleagues and learning how they isolated problems and proposed answers acceptable to the client. Similarly important was to study data and leading practices for various industries to gain new perspectives and insights. A third element was observing how to react when challenged by a client.
“Issue-based consulting is a blend of hard and soft skills,” Andrulis says. “Early in my career, as a project manager, I worked hard, did all the analytics, and came up with the deliverables, but I was not managing the expectations of clients. Consulting is a people business where you have to address each client’s needs and build effective relationships. Learning that helped me tremendously. I am also a big believer in learning from your failures as well as successes.”
Two challenges stand out in his new position. One is creating a business for the future, while meeting the short-term needs of a publicly listed company. The other is devising a more sustainable business model. Since the solutions offered to clients three years ago are now becoming “commoditised”, competitors can chip away at any advantage. “It is a constant balance everyone faces, focusing on the future while not losing sight of the present,” he says. “I always have to think from three different perspectives: what’s good for the client, the team and the business – with strategic plans for the long term and a series of ‘pulse checks’ and follow-ups to track what we want to achieve throughout the year. Organisations have to change and evolve to offer a clear value proposition to clients and as employer.”
Work can dominate, but with two children under the age of five, Andrulis does all he can to put family first and even finds time for other outside activities which include hiking, kayaking, photography and travel, In fact, in 2006, he took a year off simply to explore and take stock, hiking through Patagonia, living in Ireland, and seeing some World Cup matches in Germany.
“The interest in travel is still there, but with a family, you’ve got to make choices, and that’s where I want to spend my time now.”
Tool up for continuous journey
Jeremy Andrulis shares six important aspects of successful leadership.
Build the team’s trust “This is something that takes time and should be regarded as an ongoing process.”
Don’t ignore minor matters “They may seem little to you, but will be important to someone else. Also, balance the long term with day-to-day tactics, not to the extent of micro-managing, but to make sure specific requests are met.”
Make yourself clear “Be transparent about your thinking in the terms of the process and how you make decisions.”
Know where to improve yourself “Because leadership is a continuous journey, know what you are good at and what you need to improve on.”
Be approachable “Think about things like body language, tone of voice and showing you are open to connecting with other people.”
Remain consistent “Do what you say you are going to do and make sure you have the team, resources and support to deliver.”
Takon's Jerry Lee and Joe Wong are adding a new dimension to souvenirs, writes Wong Yat-hei.
With more and more people using social and other digital media to connect with each other, few send postcards anymore. Two young product designers, however, have given new life to this fading form of communication. Jerry Lee Tak-chun and Joe Wong Man-hon, co-founders of Takon Product Development - a business that specialises in making souvenirs - have dazzled the market with the creation of greeting cards with 3D artwork that represent Hong Kong culture.
Lee and Wong both graduated from Polytechnic University with degrees in product analysis and engineering design. They decided to start their own business to show the world the essence of Hong Kong culture.
"Our city is more than a place for visitors to shop," says Lee, the marketing director of the company. "It has many stories that are worth sharing. There are a lot of Hong Kong icons besides Bruce Lee and the Chinese junk. We want visitors to take something about Hong Kong culture back home with them, so we came up with the idea of three-dimensional, pop-up greeting cards that feature icons of Hong Kong like the lucky bun, rickshaw, bamboo theatre and many more."
With limited capital and no business experience, they turned to incubation projects for help. "We joined a business start-up support project, Youth Business Hong Kong, organised by the Hong Kong Federation of Youth Groups (HKFYG). Beside loans, their panel of business high-flyers gave us many useful tips on how to run a business, like how to handle taxes and budgeting," Lee says.
Wong, the company's creative director, is the mastermind behind the designs. "We are serious about being a business that is 100 per cent 'made in Hong Kong'," he says. "All our products are made in sheltered workshops in Sham Shui Po. It takes extra effort to train the workers and I have to be careful with the materials and the tools they work with, so they won't hurt themselves. But all this is worth it, because we are true to our core value as a Hong Kong business and it is a way for us to give back to the community."
Limited capital meant Lee and Wong were not able to start production straight away, despite the designs proving popular. "We started out designing brochures and other products for clients," Lee says. "Developing a product involves heavy investment and takes a long time, so we began with a design service in the hope of building up our reputation."
Their big break came when showcasing 3D greeting cards at an entrepreneurship day organised by the HKFYG. "Our products earned high praise from the Hong Kong Trade Development Council and they invited us to display them in their gallery," Lee says. "This was a huge boost to our reputation. Soon we were displaying our products on the shelves of major bookstores and in hotel gift shops. Now we have more than 70 outlets for our products and the list keeps growing."
Their decision to start a souvenirs business was a well-supported one. "When we were employees, we found out that a good way to start to export products to the rest of the world was through gifts and souvenirs," Lee says. "Because Hong Kong runs some of the biggest exhibitions for gifts and souvenirs, we can access buyers from around the world without having to travel."
Their idea has caught the attention of buyers from around the world. "The Metropolitan Museum of Art in New York commissioned us to make bookmarks for them after seeing our bookmarks inspired by Chinese partitions," Lee says. "The Eiffel Tower paper model is one of our bestsellers - buyers from the Middle East love them."
Taking their products onto the global stage is the plan for Takon, but it is no easy task. "We are grateful to the mentors of our incubation projects, who are veteran businessmen," Lee says. "They taught us a lot about the laws and tax systems relating to exporting products to different countries. They also gave us their insights on the market, which is invaluable to green hands like us."
While Lee says the support they received was key to getting started, he stresses that persistence and the ability to overcome hardship is essential to successfully running a business. "People who are planning to start their own business need to understand that the support from incubation projects is not going to take you to the promised land - they key is being proactive," he says. "Pick the brains of [your] mentors for business advice. There is no boss or superior to help you - you must not give up when you face an obstacle."
With 3D paper art turning into a hot trend, there have been many copycats of Takon's products. Lee and Wong see this as recognition of their success, rather than a threat.
"Consumers only appreciate original ideas," Lee says. "The creator of the new idea is the innovator and copycats are always going to be copycats. We are always a step ahead of the copycats, so we are not worried about competition from them."
AFG plans to add more art brokers as HK gears up to be a collectors’ Mecca, writes Bhavna Sakhrani.
Hong Kong’s reputation as a cash-rich emerging market for art investment was reinforced earlier this year as armies of art lovers flocked to the three-day Art Basel event held in the city in March.
Collectors have made handsome returns from buying works by the most sought-after contemporary artists and treating art as another branch of finance.
While vast price fluctuations indicate investing in art is not for the faint-hearted, the Asian market is certainly becoming an investor favourite. Art shows have seen sales growing steadily thanks to increased access to emerging talent from China, low taxes and more high-net-worth individuals.
Art enthusiasts are well catered for when they visit Hong Kong. Big international players such as Gagosian Gallery, Sundaram Tagore and White Cube have set up shop here, and the government has committed to cultivating a cultural district in West Kowloon, including a massive undertaking called the huge M+ Museum, which will span 40 hectares and focus on integrated art, design and architecture.
Investors talk about emerging markets and alternative assets, but consultants in the art investment sector are required to look more carefully at the both the profitability of the market and the emergence of new talent.
Art Futures Group (AFG), led by Jon Reade, is a Hong Kong-based brokerage art firm that turns the latest data on mid-career artists into investment recommendations and creates tailor-made portfolios of contemporary Chinese art for wealthy investors. AFG has seen growth in interest in Chinese talent, especially mid-career artists who have a good track record in terms of output and auctions.
“When the rest of the world was in recovery in 2010, China took over as the largest market in the world for art investment,” Reade says. “Hong Kong typically wasn’t an arty town, but things are changing. Once museums like M+ are built [at the West Kowloon Cultural District], they’re going to be the most popular places to go on the weekends.”
The new cultural district is a key part of AFG’s success in Hong Kong. Reade says AFG chose to open in the city because of the number of investment options in Asia – especially mainland China – through Hong Kong.
Reade says investors are looking to make discoveries outside of the typical blue-chips, focusing on edgier works by mid-career artists.
“In Hong Kong, the attention had previously been on foreign artwork. Despite local galleries opting to sell prominent art from around the world, there is certainly a hyped interest in Chinese art traditions as the economy continues to grow,” he says.
Auction houses report that more than 40 per cent of art collectors now come from China, compared to 4 per cent five years ago. They also report a more than 25 per cent increase in sales recently, citing landmark transactions in Chinese art.
Investors were astonished in April when a Chinese collector bought an ancient ceramic cup from Sotheby’s for a record breaking HK$281 million, paying for his purchase with his American Express credit card.
With Hong Kong poised to become a vibrant international art centre, promising bigger and better infrastructure, space for galleries, museums and arts organisations, Reade believes there are certainly new opportunities in the industry.
“Working as an art investment consultant does have a certain amount of glamour to it, but it’s important to figure out exactly what you want to get into because there isn’t a particular course for this line of work. If you are interested in the creative side, such as actually becoming an artist, or if you want to become a researcher, historian, curator or consultant, you have to network extensively and talk to people in the industry.”
As the Hong Kong art market continues to expand, AFG is looking to hire art brokers with a passion for the industry, who resist the notion of art as a purely financial product. “Investors are more open to putting their money in illiquid assets like art, but that requires a passion and an appetite for the business,” Reade says. “When hiring, we look for people who not only have a sound understanding of financial markets, but also an affinity for art.”
He adds, though, that the market can be tough and unpredictable. “Behind every successful business is a lot of hard work,” he says. “In Hong Kong, it’s important to cultivate relationships locally, and our focus on the mainland market means we are always searching for people with the aptitude for the work and the linguistic skills to communicate with buyers. Cantonese-speaking brokers who are interested in art are our major talent pool. Saying that, we look for inspired individuals with a passion for contemporary art and practical sales and business experience.”
Who’s in the frame
Jon Reade on what it takes to succeed in the industry.
Single-mindedness: “First and foremost, I look for people who are focused enough to know what they are interested in doing, if it is in the primary market or secondary market, and if they have the drive to attain what they want. Understandably, it’s a difficult industry to get into in Hong Kong, and takes a certain amount of grit.”
Art and investment knowledge: “We provide recommendations on a vast selection of contemporary paintings, so having an appreciation for modern art and an understanding of its cultural value as well as its potential investment yield is important.”
Sales and finance skills: “Candidates don’t have to have years of experience as art consultants, but we are looking for natural-born salespeople [with] a sound interest in finance and a background in investment, which shows a successful track record that is adaptable. At the end of the day, our objective is to make our clients as much money as possible.”
Auditing has long been a critical function for businesses. But now, more than ever, identifying and managing risk, and helping organisations achieve their objectives, are adding new dimensions to the profession.
Frances Leung, general manager of Bank of China Hong Kong's (BOCHK) group audit department, says her unit has undergone significant changes as compliance and regulatory requirements become more stringent. In addition to regularly reviewing internal audit results, her department has to respond to frequent requests from Hong Kong and mainland regulators for reviews of different areas of business operations.
"This supervisory trend signifies that the internal audit function is playing a more critical role across the banking industry," Leung says.
In addition to dealing with issues such as money laundering, Basel III and liquidity management, the bank's auditors have to adjust to different regulatory regimes as the bank expands across different geographical locations, Leung says. "We need to ensure our auditors have global perspectives and a forward-looking mindset so that we can advise and help the board and our senior management to act proactively against emerging risks."
Leung says internal audit offers excellent career-advancement opportunities. Generally, professionals with five or six years' experience will have acquired a broad range of knowledge that will allow them to move between different businesses and functions.
For example, senior-level audit professionals who can demonstrate outstanding leadership skills and all-round business acumen may be promoted to key roles such as chief financial officer, chief risk officer or chief operating officer. "There are also examples of our auditing staff becoming branch managers or corporate banking managers," Leung says.
BOCHK looks for candidates with finance- and business-related academic backgrounds when recruiting internal auditors. In addition, as technology-related expertise becomes an increasingly important part of the internal auditing roles, disciplines related to computer science are also relevant. "It is crucial to build up a team with a balanced mix of expertise and skills so that job responsibilities can be discharged appropriately," Leung says.
Internal auditors at BOCHK periodically undergo cross-departmental job placements, allowing them to build up multidisciplinary knowledge within the banking sector. "We also place emphasis on helping our internal auditors develop critical thinking and interpersonal skills," Leung says.
Peter Koo, enterprise risk services partner at Deloitte China, is another experienced industry practitioner who believes that the auditing profession offers rewarding roles for those with the right experience and qualifications. "We usually recruit and help employees to gain their professional accounting qualifications before providing additional specialist training, such as IT auditing training," he says.
Koo explains that with cybersecurity a growing concern among corporate leadership, clients are looking for help to improve their security infrastructure and analytical processes. To help combat hacking and other technology related threats, Deloitte staff train for additional specialist qualifications such as certified information systems auditor, certified internal auditor and certified fraud examiner. "Our team of professionals is equipped to offer both auditing and advisory services," he says.
While in-demand auditors may be tempted with job offers once they have gained their CPA qualification, Koo cautions young professionals to consider their futures before changing jobs. "If they stay with their employers once they gain their professional qualifications, young professionals can continue receiving vital training that will enable them to become industry specialists. This opens the way to even bigger career opportunities."
Christine Wright, managing director of Hays in Asia, says that with constantly evolving regulations and market conditions, internal and external auditors are highly valued, in demand and in short supply. "Over the past five years, the internal audit function has become increasingly valuable to organisations," she says. She adds that companies are seeking employees with leadership potential and the ability to work well in a variety of different environments and with a diverse range of colleagues and executives.
Wright foresees that with Hong Kong stock exchange (HKEx) proposals on internal audit consultations expected to increase demand for auditors, more pressure will be placed on companies that need to recruit and retain auditing professionals. The HKEx proposals include seeking enhanced accountability of the board, board committees and management by clearly defining their roles and responsibilities in relation to risk management and internal controls. "In an already candidate-short market, this will pose a real challenge for companies looking to recruit quality audit candidates," Wright says.
Furthermore, experienced auditors will be able to command higher salaries and employers will need to attract them with robust career opportunities and other employee-retention strategies, Wright says. This includes options to transfer into areas such as risk, front office and other corporate functions.
Victor Paraschiv, a senior manager with management consultancy Sia Partners, says fundamental regulatory and compliance changes, particularly in the banking and finance sectors, is creating career opportunities for those with auditing experience that are looking to join the consultancy industry.
"Traditionally, if you look at the sweet spot, it is people with three to five years of on-the-job experience who are ideally placed to join the consultancy industry," says Paraschiv, whose firm is looking to recruit audit and risk compliance professionals.
He says recruits with a few years of experience can benefit from comprehensive internal training and the exposure that consultancy work provides. "As consultants, we help our clients to examine and evaluate controls to determine if they are working as intended," Paraschiv says.
Meanwhile, Nicolas Tollie, a senior manager at Sia Partners, says the role of auditors will continue to expand due to changes in regulatory frameworks. "Auditors and people with risk and compliance backgrounds are needed to help clients with their requirements across the entire business and operations process," Tollie says.