Royal Skandia Life Assurance, part of the big Swedish Skandia financial services group, is a specialist in providing investment-linked products. 'Royal Skandia only provides investment-linked insurance products, and they form our core strategy,' says Francine Kwong, regional director for Royal Skandia Life Assurance. 'We provide tools that help advisers to conduct financial planning. We do not have other lines of product. This allows us to be very focused.' Ms Kwong says Royal Skandia's product range could be broadly divided into two groups: regular savings and lump sum investment. 'Everyone has needs in terms of financial planning, but it is fair to say that, due to the complexity and contribution level of our products, we cater for the middle- to high-income segment.' Investment-linked insurance products have gained in popularity over the past few years. New premiums for investment-linked products jumped by almost 50 per cent to HK$3.7 billion in 2001, according to figures from the Office of the Commissioner of Insurance. Asked whether the rise in popularity was the result of marketing efforts of insurance companies or some basic feature, such as useful product design, Ms Kwong said: 'There is no doubt investment-linked products have enjoyed a healthy growth and become more important in the long-term insurance market. It is possibly a combination of factors. But it is hard to tell which one is the strongest force.' She has noted an increase in the number of companies offering investment-linked insurance products. 'They all have a strong distribution force, leading to a wider coverage of the general population.' Ms Kwong also cited increasingly sophisticated investment habits among local investors as another reason for the popularity of investment-linked products. She said investors these days understood the need to diversify away from one or two favoured sectors. 'Most of us in Hong Kong used to rely on property or direct stock investment for capital growth and financial solutions. As these tools become less prominent in portfolios, people turn to other vehicles for financial planning.' Ms Kwong said the Mandatory Provident Fund (MPF) had raised awareness of long-term retirement savings in the community. A few years ago, property and stocks were the only vehicles people considered, but the downturns in these markets has forced people to look further afield when selecting vehicles for long-term investment. 'Everyone seems to be conducting financial planning these days, including the retail banks,' Ms Kwong says. 'A look at the number of people who took part in the CFP [Certified Financial Planner] Certification Examination is a good indication of how popular financial planning has become. Investment-linked insurance, one of the popular tools for financial planning, has benefited from this trend.' With the growing popularity of investment-linked products have come complaints from certain consumer groups that products have been sold on a less than full and open basis. Ms Kwong says Royal Skandia makes sure its customers are offered suitable products, with regulation by the Insurance Authority and the Securities and Futures Commission ensured clear disclosure of terms and charges. 'All brochures and offer documents must be approved by the SFC, and ours are no exception,' she says. Most people base their purchase of investment-linked products on the advice of an insurance intermediary who either represents the interests of the client (as a broker) or that of the insurance company (as a company agent). 'The professionalism and knowledge of such intermediaries is no less important than the transparency in charges and terms on offer documents,' Ms Kwong says. 'In fact, many of us would argue that it is more important. Royal Skandia has committed resources to training by providing in-house accredited courses for independent advisers.' She says Royal Skandia and its sister companies are strong supporters of the CFP qualification. Ms Kwong expects increasingly sophisticated products to appear in the market as consumers become more knowledgeable about financial planning and investments. 'We see a consolidation of financial advisory firms. Those who focus on advice (as opposed to transactions), professional knowledge and training will become the driving force in the market,' she says. 'As more people choose such products, the regulation of such products will probably get tighter. Financial planning as a career will also become more popular. In the United States and Canada, financial planning is seen as a respected and attractive career to get into. 'We think that Hong Kong will eventually follow that path,' Ms Kwong says.