Free advice as good as cash

PUBLISHED : Sunday, 20 March, 1994, 12:00am
UPDATED : Sunday, 20 March, 1994, 12:00am

''FREE'' and ''bank'' are not words that the long-suffering banking public of Hong Kong have come to associate with each other.

With most retail banks tripping over themselves in their rush to introduce charges, or otherwise hide fees, many people may find it refreshing that at least one private bank appears to be offering something for nothing.

More than 1,000 people have taken advantage of Hill Samuel's Personal Financial Planning Service since it was introduced almost a year ago.

Barry Lea, Hill Samuel's regional director of financial services and marketing, said when Hill Samuel started the service last year, it accompanied the launch with an advertising campaign.

''Frankly, we were rather taken aback by the scale of the response. We were forced to revert to only repeat and referral cases until such time as we had bolstered the necessary resources,'' Mr Lea said.

''That time is now upon us, since our account manager and support functions have been expanded in recent months.'' He said anyone, whether a Hill Samuel client or not, could now request a personal financial planning review, a service for which some advisers charged $5,000.

The service is to provide clients with an ability to develop their broader and longer-term financial plans.

This involves linking some of the bank's departments to make available loan, fund management and treasury services. It also covers providing protection and savings services in conjunction with many leading life assurance offices and other investment houses.

Clients may now, effectively, have access to wide-ranging, professional and impartial financial planning advice in investment management, retirement planning, disability income, will and inheritance planning, regular savings, trust and company formation, income replacement, education fee planning, medicare, partnership protection and key-man assurance.

Hill Samuel has also produced free fact sheets covering many of these areas.

Account managers will sit down with clients to establish their personal and financial circumstances and clarify their plans, before producing a personal financial plan.

Cases are reviewed and suggestions sought, as necessary, from Hill Samuel's panel of external specialist advisers in Hong Kong and elsewhere.

Clients are then presented with a plan summarising their position, and given detailed recommendations.

These cover issues ranging from investment advice, structuring a property purchase, to organising a will.

While the clients are not obliged to accept the advice, most act on some, if not all, of the recommendations.

''People often complain that, given the general pace of things in Hong Kong and the pressures of work, they simply do not have the time necessary to thoroughly review and map out their own financial affairs,'' Mr Lea said.

''Our service, which may be initiated either at the bank or in a client's office when necessary, will be 30 or 40 minutes of anyone's time well spent.'' Although the service carries a private banking label, it is not necessarily aimed at people who have telephone-number bank balances.

''We aim to remove the mystique from this aspect of private banking,'' Mr Lea said.

''Despite a general perception to the contrary, personal financial planning is not solely the province of the wealthy - and without it wealth could prove rather more elusive for many.'' Carl Huckstep, manager of financial services, said by offering the service for free, Hill Samuel was trying to ''initiate relationships that would continue over the long term'', involving credit, investment management, insurance, asset protection and other financial services.

''For this reason, we readily sacrifice short-term returns,'' he said.

''I suppose you could view it as the private banking equivalent of a retail loss leader.'' Hill Samuel started with the client, rather than a product, he said.

''Unlike many so-called financial planners, we will only know what recommendations to make after what could be a lengthy meeting with a client and not before,'' Mr Huckstep said.

''All our staff are salaried, neither I, nor any of our advisers, is looking to pay next month's personal bills on the back of this month's clients.'' After the first review, clients will be contacted every six months to ensure the recommendations remain valid in the light of any change in circumstances.