Software to give advisers hi-tech edge

PUBLISHED : Saturday, 11 July, 2009, 12:00am
UPDATED : Saturday, 11 July, 2009, 12:00am

One key feature of the SCMP/IFPHK Financial Planner Awards over the past five years has been to maintain three distinct categories for entrants working for banks, insurance companies or independent financial advisories (IFAs). Besides recognising the full scope of the industry, this has made it possible for practitioners to match themselves against the best in their sector, and to compare experiences with contestants from different branches of the profession.

Certain points consistently emerge. Client expectations continue to rise. Then, there is the importance of having a sufficient range of products to offer each customer solutions that meet their individual needs. And, finally, there is the advantage that comes from using the holistic six-step approach recommended by the Institute of Financial Planners of Hong Kong (IFPHK). This provides a clear framework for discussion and a firm basis for choices and decisions.

It is no coincidence that, over the past few years, successive award winners have relied on the six-step process when writing initial entries and when presenting their plans to the judges. And, seeing how these principles give advisers a comprehensive and transparent model, which also obliges clients to closely consider their investment priorities, companies have come to view them as an industry standard.

'In the third quarter, we will launch software that specifically enables advisers to conduct the six steps of financial planning and follow best practices with their clients,' said Kelvin Yip Hok-yin, general manager of platform services for iFAST Financial (HK), the lead sponsor of this year's awards.

Mr Yip explained that the new module in the company's 'adviser matrix' software would make it easier for signed-up users to guide people through each stage of the process. By completing details and the various prompts, they will be able to collect information needed for an analysis of a client's financial needs and check their risk tolerance, consider investment options and implement an agreed plan.

'All the elements will fall into place,' Mr Yip said. 'The strength is that advisers will still talk to clients and explain each step of the process, but the software will help them to calculate examples, compare different options and systematically rebalance the portfolio.' He believes this combination of sound planning principles and hi-tech support is the way forward. It offers a chance to demonstrate the level of professional expertise the public now rightly expects and will empower advisers to do more business.

In essence, Mr Yip said iFAST's proposal was: 'You do the professional advisory service; we do and support the rest.' In terms of software support, that means offering portfolio simulation, review of client holdings, online transactions, and the latest economic data and research. Regarding investment products, the platform is being expanded to give access to 700-plus different funds - global, Asian, emerging market, thematic and alternative investments - for advisers to make available to end-users.

'It works well because many of the IFAs are small practices; their strength is building relationships with clients,' Mr Yip said. 'We line up products for them and take care of the back-office stuff like order placement, transactions, reporting, research and correspondence with fund houses.'

Having started operations in Hong Kong in 2007, iFAST is already working with more than 70 locally based IFAs. These firms represent about 1,200 individual advisers of whom 350 are actively using the platform and other support.

Based on experience in Singapore, Mr Yip expected the number to increase rapidly. There, the company has gone from less than 5 per cent of the IFA mutual fund business in 2002 to 33 per cent last year. 'Previously, advisers were too bogged down with administrative work,' Mr Yip said. 'Now, it is easier for them to focus on asset allocation, building a portfolio for clients and finding new business.'

To assist, the company laid on two forms of training. One involves a 15-strong in-house team which explains the operating model and system to individual advisers in small introductory classes and one-on-one sessions.

The other centres on regular monthly briefings by the research team, external fund managers and investment planning courses that stress the value of the IFPHK's recommended six-step process.

Concerning other developments in the sector, Mr Yip noted a discernible trend towards the recurring income model and away from commission-based remuneration. He backs this move, believing that it makes sense for advisers to charge an annual advisory fee linked to the value of each client's assets under management.

To view all the first round winners, please visit