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Amy Lo, Chairman of Private Wealth Management Association, told us that back in the 1980s when she first began to work, private banking was mainly about providing traditional banking services to individuals, hence its name "private banking". Over time, the industry has gradually transformed into what we call "wealth management" today. "Now, we have to take care of the clients' personal needs including their families and businesses. It goes beyond investment. It is a holistic approach to managing their total wealth."
Thanks to the rapid growth of wealth in Asia, there are increasing opportunities in the wealth management industry in Hong Kong. According to the Billionaires Report jointly published by UBS and PwC, led by China, Asia created a new billionaire every three days in 2015. The 113 billionaires in the region represent more than half of the global total for the year.
Many of the ultra-wealthy are first or second generation wealth which means there is a huge demand for all-round wealth management services including wealth preservation, planning for succession, family governance and philanthropy.
While the opportunities are great, so are the challenges. Amy thinks innovative technologies impact all businesses, including wealth management. New technologies such as robo-advisors, artificial intelligence and virtual reality, are all transforming the industry. Practitioners must embrace technology and keep up with the latest development.
"We need to help our clients by leveraging mobile apps, helping them navigate the rapidly changing environment and managing their portfolios more efficiently, especially for the younger clients who are more tech-savvy," she said.
"A good soccer player knows where the ball is but an excellent soccer player knows where the ball will be."
According to a report jointly published by Private Wealth Management Association and PwC in 2016, the wealth management industry in Hong Kong faces many challenges including the changes in technology and regulation. Amy reminds her younger colleagues to stay humble and open.
"A good soccer player knows where the ball is but an excellent soccer player knows where the ball will be. As a practitioner, it is very important for us to foresee the next technological and regulatory changes and how they may impact the industry. What is more important is how we can turn these challenges into opportunities."
Another challenge for the industry is that the talent pool in Hong Kong is very limited, especially in the front office. There are only about 3,300 front office practitioners in Hong Kong, which is obviously insufficient to cope with the growth of wealth in the region.
Therefore, the Private Wealth Management Association, which is formed by 46 private banks, is keen on nurturing talents. The Association has developed Enhanced Competency Framework (ECF) and Certified Private Wealth Professional (CPWP) certification, as well as organized events on popular topics such as risk management and compliance for practitioners in the industry. Just recently, it has submitted a proposal to the government on creating an apprenticeship program for university students that focus on both front to back office training.
Tips to the younger generation
Our job is to listen
"Wealth management is all about trust. To gain trust from our clients, we have to listen to their needs and help them reach their goals. Young people should not only equip themselves with financial knowledge but also pay attention to current affairs and markets. It is important to have your own view!"
"The questions I usually ask in interviews aim to help me understand the candidates' interpersonal skills because the main duty of a wealth manager is listening to the clients, asking the right questions, and conveying suggestions and plans effectively. I will also see if the candidate fits our culture, whether the candidate will put the clients' benefits first, and whether the candidate has the passion for the job."