ONE LESSON MANY people learned during the past economic downturn was that it is never too early to start planning for long-term financial needs. The sooner you begin, the easier it becomes to achieve various personal and financial goals and, ultimately, to enjoy a retirement free of money worries. With this principle in mind, the Institute of Financial Planners of Hong Kong (IFPHK) has been running a competition for local undergraduates to encourage awareness of retirement planning and the need to establish investment priorities. 'We believe it is a good way for full-time university students to start learning about the financial planning process,' said Louis Cheng, associate professor of finance at the Hong Kong Polytechnic University and an IFPHK executive committee member. 'The idea is also to educate them on the importance of the role of the MPF.' Dr Cheng explained that the competition is based on a detailed case study of a married couple with one son and certain financial obligations and constraints. Over the first two rounds, contestants are asked to write and then refine a comprehensive financial plan for the family. It must be based on the data provided and take account of the proper MPF perspective on retirement, while including recommendations on appropriate investment strategies. The seven teams selected for the final round are then asked to present a written and oral report to a panel of three judges, and to answer supplementary questions that come up. The prize winners, who will be announced at the end of this month, receive scholarships ranging from $5,000 to the top award of $20,000. Dr Cheng, who oversaw the judging of the first two rounds, said he was impressed by both the total of 57 entries and the very high standard of submissions. 'Initially, we were looking for financial planning advice related to insurance protection, cash flow management and proper usage of the MPF,' he said. 'At the second stage, there was more emphasis on quantitative analysis and forecasts.' The final round is also a test of overall presentation and communication skills. One of the judges assessing these is Darren McShane, executive director of the regulation and policy division for the Mandatory Provident Fund Schemes Authority, which is sponsoring the competition. 'We were involved in the development of the case and, after last year's contest for financial planning practitioners, wanted to target a younger group,' he said. 'The MPF system covers workers from 18 to 65 and it is important for undergraduates at the start of their working lives to understand it. They can also help in our efforts to get the message across to the whole community.' Mr McShane added some of the students taking part in the competition might go on to careers in Hong Kong's financial services sector. If so, they would see that the MPF was not something separate but at the core of any financial plan. 'We have a multi-point strategy to increase consumer awareness and people should see the MPF as part of a holistic financial planning process.' Jiawen Zhang, a second-year student of economics and finance at the University of Hong Kong, must have already got the message. Her three-person team made it through to the final round and her interest in retirement schemes generally was increased by a recent internship in Washington DC. 'There is a lot of discussion there about social security and retirement funds,' she said. 'It is a business-oriented topic that has become part of the bigger political picture. It makes you realise we will all retire some day and need to know how to make ends meet.' While she was overseas, Ms Zhang's team prepared their case study with the help of 'internet meetings'. They divided responsibilities so that different team members handled quantitative analysis, research on the MPF scheme, and report writing and general organisation. Li Man-kiu, a second-year Bachelor of Business Administration student at the Chinese University of Hong Kong, noted the same thing. Her four-person team paid particular attention to case assumptions about inflation and the life expectancy of the family members when writing their plan.