One group of advisers is having difficulty establishing a presence in the face of new rules and competition from banks
THE MARKET FOR independent financial advisory services in Hong Kong has experienced significant changes since the launch of the Mandatory Provident Fund scheme in 2001. The public has grown more conscious of the need for careful retirement planning, which has led to an upsurge in demand for professional financial advice. But despite this boom, local independent financial advisers say they are facing challenging times and are struggling to make their presence known.
Banks and insurance companies have played a significant role in shaping these challenges for independent financial advisers in the past five years. While some long-established financial advisory groups, such as Allen Perkins Group and Towry Law, have left town, and a number of new players, such as ipac Financial Planning, having sprung up, retail banks and insurance firms have become the most visible players and raised competition significantly.
On the regulatory front, since the enactment of the Securities and Futures Ordinance in 2003, independent financial advisers have been held to stricter governance rules, with the Securities and Futures Commission putting in place specific admission criteria for independent financial advisers and holding them to ongoing obligations to ensure their competence.
Stephen Gollop, chief executive of Bridgewater, a local independent financial advisory firm, said one of the key challenges for independent financial advisers was to raise awareness of the services they offered. The perception that they only sold investment or life insurance cover was still widely held by the majority of people in Hong Kong, he said.
'The idea of how much a financial planner can do, particularly for the local population, is just not known. It's a case of getting the message out and I don't see anybody doing a large-scale job of that.'