Wealth management bid bound to fail
Last month the Hong Kong Institute of Bankers, Treasury Markets Association and Hong Kong Securities and Investment Institute published a consultation paper.
It seeks to help Hong Kong gain a larger share of the private wealth management (PWM) business in Asia-Pacific, by establishing a new qualification - certified private wealth professional - and a PWM association, to improve standards of training, qualification and the integrity of PWM practitioners.
Will this initiative achieve its objectives? I think not.
The primary reason Hong Kong does not make headway in gaining a greater share of the available PWM market in Asia Pacific is because banks have been very slow to establish credible private banking platforms, after the abolition of estate duties in Hong Kong, to compete with Switzerland, Singapore and others.
Also, government, and in particular Legco, throughout at least a decade, has failed to update the antique Trustee Ordinance and to introduce regulations and education in support.
I suggest that, unless action is taken urgently to correct these defects, Hong Kong will continue to languish in the backwater of PWM in Asia-Pacific.
Is there a need to improve education and qualifications in Hong Kong for PWM practitioners? There is, but the creation of yet another qualification and association is not the method by which to achieve this, as it simply duplicates what exists.
Each service that comprises PWM already has its own education system, qualifications, associations and regulatory regimes, so why do we need something new? Surely it would be more sensible to improve what we already have rather than seeking to reinvent the wheel .
Nobody, for whoever they work, should be authorised to give unsupervised advice to clients until they have adequate qualifications and experience.
This cannot be acquired after a few days of lectures. It should be the product of several years of education and supervised experience.
To establish a new qualification which appears to run the very real risk of giving credibility to those who do not deserve it, simply exposes the consumer to greater, not reduced, risk.
For these reasons I suggest that this new initiative should be reconsidered or abandoned altogether.
N. B. Bentley Central