Prudent approach pays off

PUBLISHED : Friday, 07 November, 2008, 12:00am
UPDATED : Friday, 07 November, 2008, 12:00am

Wealth management companies have taken measures to ride out the financial crisis sweeping the world. We speak with Roger Steel, chief executive of Sun Life Hong Kong, to gauge what he thinks will happen in the financial services sector in the next few months.

What has life been like in the financial planning business over the past few weeks? Has it been hectic? Have your people had to spend a lot of time reassuring clients that their finances are safe? Communication is playing a crucial role in the financial turmoil. [Canadian insurer] Sun Life Financial has been proactively communicating with staff, financial advisers and customers on our latest standing.

Has the financial crisis in the United States and Europe affected your company? Sun Life Financial remains a strong and well-capitalised company. Like most financial institutions, we are not immune from the marketplace challenges. The financial turmoil has affected our overall third quarter 2008 results. However, our prudent approach to capital and risk management positions us well to withstand the current economic environment. At the end of the third quarter, the Sun Life Financial group of companies had total assets under management of C$389 billion (HK$2.491 trillion). As of September 30, 2008, Sun Life maintained cash, cash equivalents and short-term securities totalling more that C$6.6 billion.

What can a financial planning firm do to ride out tough periods like the one we are going through? Based on customer insight, Sun Life Financial is focusing on selling traditional products to satisfy our customers' needs and changing risk tolerance levels. Traditional product sales are up 130 per cent this year in Hong Kong.

How do you see the financial planning sector faring in the short to medium term? Like all the others, we do not know how far, how deep and how long the financial turmoil will affect us. However, with Sun Life Financial's prudent approach to capital and risk management, it can position us well to withstand the current situation.

Is your company recruiting people? Hong Kong is a place where face-to-face selling works. We put a lot of effort into growing and developing our agency force, which is 10 per cent up from the start of the year, though the market is tough. We are also building our current strength in the MPF [Mandatory Provident Fund] and IFA [Independent Financial Advisory] sectors. We would like our customers to be served by our professional advisers. We are still recruiting especially in the area of sales, marketing and MPF specialists.

What type of training do you give to staff? Sun Life Financial believes in continued improvement. We have been in Hong Kong since 1892. Today, we have 600 staff and 1,400 advisers. Sun Life has a number of offices in Hong Kong with the regional head office in Taikoo Place and a brand new training centre at 909 Cheung Sha Wan [Road in Kowloon]. The government requires advisers to renew their licence with a minimum of 10 hours of training per year. Our training centre offers an average of 73 hours' training to advisers on license course, product training, soft selling skills, financial needs analysis and management courses to support our 'plan your future with experts' positioning. We also run a three-year diploma course in conjunction with the Chinese University called Executive Financial Planning, and graduates can apply for further IMBA study at the Victoria University of Wellington in New Zealand. We strongly encourage advisers and staff to continue their studies. Besides a normal career promotion path within your own areas of expertise, Sun Life can also offer regional exposure. There are more than 60 staff who are being transferred to different locations around the Asian region. These include information technology specialists, technical people, legal, product development and actuaries. Incentive programmes for advisers are based on their sales and recruitment performances. Awards include compensation, trophies, incentive trips and publicity.

What is remuneration like? For staff, a performance-based bonus is based on the group's profitability, Asian regional productivity, the country's productivity and your personal performance ranking. There is a formula to calculate the bonus and every individual will have their own set of KPIs [key performance indicators] at the beginning of the year, a mid-term review and a final review by year end. The review process is called PMP (Performance Management Programme). It is a very structural and opens with a development plan for individual staff. The brand building activities of the company use a large-scale multimedia advertising and public relations campaign with the assistance of corporate merchandise, publications, website and every touch point in a customer journey, such as Sun Life Financial Cafe at the Gateway and the customer hotline. To strengthen our MPF positioning in the market, we have launched an MPF advertising campaign on Metro Radio. Nowadays the remuneration package is not the only concern for the staff. They are looking for a balanced lifestyle. We have an assistance programme to counsel them, if necessary. Our company also did a lot of community projects. We have a group of volunteers called 'Sun Life Shining Action'. We helped to organise and bring underprivileged children out for summer activities.

How do you keep up communication with staff? Every quarter we have a briefing session for a larger group of 120 managers. And every year we have a town hall meeting involving 600 staff. In addition, the group will have an employee opinion survey every year. Agency communications will be treated differently. Every month we have an agency managers' meeting. And twice a year we have a big town hall meeting gathering of all our advisers to tell them the direction of the company. Advisers can give us their feedback via their 'treetops' [sales in charge] or talk directly to the functional head. The agency will also have its agency loyalty survey to give us their feedback.