Qualified advisers are hot property

Demand for investment planners is soaring on economic growth, and banks are hiring the majority of new blood Demand for qualified investment advisers has continued to soar on the back of wealth generated from recent years of steady economic growth, and banks are soaking up the lion's share of the new financial planners coming into the market, official figures suggest. The total number of licencees registered with the Securities and Futures Commission (SFC) grew by 4,489 during the 12 months of 2006 to reach 34,919. Another 25,000 were employed by authorised institutions regulated by the city's central bank - essentially banks and smaller lenders, according to Hong Kong Monetary Authority (HKMA) figures for last month. HSBC employed more than 4,200 registered investment advisers, while Bank of China (Hong Kong) was not far behind with some 3,600; Hang Seng Bank employed 2,545; Bank of East Asia 1,182; DBS Bank (Hong Kong) 1,009; Nanyang Commercial Bank 871; Standard Chartered 709, and Citibank 542. In their annual reports, Hong Kong banks revealed a growing contribution to profits from their wealth management divisions. Demand for advisers to distribute bank products has also boomed. Human resources consultancy Hudson said in its latest job market report: 'The banking and financial services sector reports the highest expectations, with 61 per cent saying they will grow headcount, compared with 58 per cent in the first quarter. This quarter generally sees an increase in hiring activity, once bonuses have been paid in the first quarter and staff feel free to change jobs.' Another 38 per cent of banking and professional services respondents said they expected headcount to remain steady, while 1 per cent believed it would decrease. In the second quarter of 2007, firms expected 36 per cent of total recruitment forecasted to be from sales positions, with banking front office roles expected to be the main driver for this growth. Banking operations, middle office and accounting and finance roles were expected to account for another 21 per cent of new jobs, the report stated. The report said: 'Part of this demand is driven by the growth in Hong Kong's hedge fund market. New hedge funds are opening and existing funds are expanding, increasing demand for sales and support staff.' In its second quarter outlook report for Hong Kong jobs, employment specialist Manpower International polled a continuing bullish mood among employers, with respondents reporting that they expected their workforce to expand during the quarter from 20 per cent to 26 per cent. Just 2 per cent forecast a decline in headcount. The finance sector reported the highest increase in manpower requirements. 'Without seasonal adjustments, employers in the finance, insurance and real estate industry report a favourable net employment outlook of 33 per cent,' noted the survey. 'This represents a considerable increase of 15 percentage points quarter over quarter.' But early signs that the explosive growth rate in employment might be slowing, have also emerged in the latest Manpower survey, which noted that while the quarter-on-quarter growth represented a resurgence of demand, recruitment intentions were one percentage point weaker than the same quarter last year. A Securities and Futures Commission survey on investment advisers last year showed that most retail investors who used the services of investment advisers dealt with in-house advice offered by their banks. The survey, conducted by the Centre for Corporate Governance and Financial Policy of Baptist University on behalf of the SFC, ran from November 2005 to last April. The aim was to explore retail investors' considerations in choosing investment advisers (IAs). 'Based on the IA that investors dealt with most recently during the last two years, 64 per cent dealt with personal financial advisers or planners of banks,' it reported; while 25 per cent dealt with SFC-licensed persons and the remainder (11 per cent), dealt with insurance agents/brokers. In selecting an IA firm, the top three factors considered were: reputation (79 per cent); service quality (66 per cent); and whether the firm was SFC-licensed or not (64 per cent). Advisers who take the alternate (non-bank) route, must be licensed by the SFC, and examinations leading to an SFC licence are set by the Hong Kong Securities Institute (HKSI) - a professional body formed to raise the standards of securities and finance practitioners in Hong Kong. HKSI chief executive Gary Cheung Wai-kwok said the number of non-bank qualified investment advisers being licensed annually to operate in the Hong Kong market was growing at a rate of about 10 per cent a year - more than twice the average rate of employment growth. Mr Cheung said Hong Kong's status as an international financial centre was ensured by the globally-recognised standards of the personnel in the sector. Surveys have shown that Hong Kong has more than 3,000 Chartered Financial Analysts - an increase from just 200 in 1995 - and which makes the pool of CFA talent in the city the fourth-largest in the world. Hong Kong is also ranked first in Asia in terms of the ratio of Certified Financial Planners to the population, and the number of Certified Public Accountants has grown from about 11,500 in 1995 to more than 25,000 today, while that of qualified actuaries has almost tripled over the same period. In addition more than 5,000 solicitors and about 1,000 barristers are now practising in Hong Kong. 'Hong Kong is an international financial centre and this is made possible by the high quality of its intermediaries,' said Mr Cheung. 'Hong Kong operates as an open market and we do not set restrictions on where qualifications and expertise is obtained. So in the case of people with overseas experience, a competency test is applied and they can then be licensed based on their industry qualifications. 'We have a very good regulatory and supervisory system - under the administration of the SFC, the HKMA and the Insurance Council - and also a sound legal framework, which means that we are very much on par with our counterparts elsewhere in the world,' he said. This is the second in our series of articles tracking this year's SCMP/IFPHK Financial Planner Awards, a competition between professional financial planners from the banking, insurance and independent financial advisory sectors, which concludes in October. Check this space regularly for the latest updates. It's official The total number of investment advisers employed by authorised institutions regulated by the Hong Kong Monetary Authority, the city's de facto central bank 25,000