WITH THE REBOUND in Hong Kong's economy over the past two years, there has been a steady increase in the number of local investors who fall into the category of high net worth individuals. This has prompted investment advisers in the financial services industry to focus greater attention on the wealth management sector, which basically concentrates on clients whose priorities have moved beyond wealth creation to methods of accumulation, preservation and distribution. It has also led to a general acknowledgement that, as the industry grows, the diverse range of investment products on offer will make it necessary to rethink the somewhat confusing system of regulatory controls now in place. In recognition of this, the Institute of Financial Planners of Hong Kong (IFPHK) has organised a one-day conference on Tuesday at the Conrad Hong Kong hotel on the subject of 'Wealth management: challenges, opportunities and the way forward'. The main purpose is to provide a timely update on the industry for an audience which is expected to include senior decision makers, representing commercial and private banks, insurance companies, independent financial advisers, brokerages, law firms and regulators. 'This year the invited speakers and panel discussions will address issues of particular importance to larger institutions,' said Angeline Chin, the IFPHK's chief executive. 'We will also look at how the wealth manager's role is changing, ways to build better portfolios, and how new technology is affecting the industry.' In particular, one session will focus on whether the so-called Australian model of regulating the financial planning sector should be adopted in Hong Kong. It is understood that the Securities and Futures Commission is already studying this example and assessing its comparative strengths. 'It is important to know how the Australian model works and to understand the changes made over the past few years,' Ms Chin said. 'They have certain mandatory requirements relating to things such as investment policy and disclosure of commission which have helped to tighten up the level of industry regulation in Australia.' Derek Young, chief executive of ipac Asia and a participant in the panel discussion, confirmed that view. He said the overarching principle in Australia had been to establish a single licensing regime for the financial services sector. This clearly contrasts with the situation in Hong Kong, where service providers and specific investment products are overseen by different bodies such as the Securities and Futures Commission, the Hong Kong Confederation of Insurance Brokers and the Hong Kong Federation of Insurers. 'The challenge here in Hong Kong is at a regulatory level,' Mr Young said. 'It is definitely a good idea to have a single authority, since it can create greater transparency for both financial planners and consumers. It can also ensure that advisory firms are properly run and have the necessary levels of competence.' Generally, though, Mr Young believes the outlook for wealth management in Hong Kong is very positive. 'The market is healthy and the industry has a tremendous future,' he said. Francine Fu, regional director, Far East for Royal Skandia Life Assurance, expressed similar confidence. She noted, though, that one challenge facing all companies offering financial planning services was that clients were more demanding. She said advisers were now expected to provide 'holistic' solutions, covering everything from retirement planning to tax and investment advice, and to be knowledgeable about all of them. 'From the point of view of an insurance company, it is therefore important to have employees who are fully qualified as certified financial planners,' she said. 'However, this development also highlights how fragmented the regulatory framework is in Hong Kong. As the market becomes more mature, it is fair to say that many people are talking about the possibility of having a single independent regulator.' Another topic on the minds of wealth managers is the advance of technology. Customers with complex portfolios now expect all relevant details to be summarised and sent to them 'at the push of a button'. As Ms Chin explained, this had led to a differentiation between organisations at a technical level. Some already provide consolidated statements, calculations of risk and the latest status of hedge fund investments, while others are still catching up. For this reason, one conference session will examine how technology can be applied to achieve greater efficiencies and drive profitability. 'A company must now have the technology to provide the appropriate level of customer service, and be able to manage everything under one roof,' Ms Chin said. Clearly, this will have a knock-on effect on the role of individual wealth managers. In the future, they will have more data, enhanced investment models and the ability to rebalance client portfolios more easily. The expectation within the industry is that this must go together with a 'culture of integrity' and con-tinuous learning. Consequently, the Wealth Management Conference will also include case studies on risk tolerance. In Ms Chin's opinion, as the industry moves forward, Hong Kong will be well-positioned to act as a regional centre for financial planning and wealth management.