Popular wisdom in Hong Kong tends to enshrine property ownership as the key element in any investment portfolio, but one of the repeated mistakes in managing personal wealth is to get swept along by this type of thinking.
Although the attraction of one's own home and the promise of escalating values are hard to ignore, it often makes better sense to focus initially on two main pillars of sound financial planning - protection in case of setbacks and a diversified platform to accumulate assets.
'We find it is common in Hong Kong for the mix of investments to be quite unbalanced, with people perhaps putting too much emphasis on getting a property first,' says Roger Steel, CEO of Sun Life Hong Kong. 'Therefore, we recommend they go through a proper financial needs analysis to identify real priorities and expose areas of potential concern.'
Guided by a qualified agent or financial planner, the process aims to be comprehensive. It might look, for example, at making provision for anticipated expenses such as children's education or care for elderly relatives. And, as sensitively as possible, it would ask the individual investor to consider various 'what if' scenarios.
Understandably, most people prefer not to dwell on the financial consequences of a serious accident or long-term ill-heath, but such issues can't be avoided.
'There is a responsibility to make sure that if something happens to the breadwinner, the family can keep going,' Steel says. 'We ask about 'life value' and likely future expenses for every member of the family. This makes it easier for customers to get the message and ensures they are really cognisant of the implications of something unexpected happening.'
Greater awareness generally leads to a new appreciation of the need for fuller protection through tailor-made life, critical illness or fixed-term insurance policies. And it tends to inspire new interest in the expanding range of investment-linked assurance scheme (ILAS) products, which include a protection element while also giving access to major investment funds specialising in different regions and industries.