Huge rewards for planning ahead

John Cremer

Participants in the university student category say competing has been a valuable learning experience

One of the golden rules of financial planning is that you are never too young to start and the high standard of entries in the SCMP/IFPHK Financial Planner Awards 2007, university student category, shows that many young people in Hong Kong have already taken the principle to heart.

The competition invited teams of three or four to pit their wits against their peers and come up with a comprehensive written financial plan for a 'typical' family based on circumstances outlined in a carefully chosen case study.

Those who have made it to the second round next month will present their recommendations before a panel of judges and can hope to win prizes, including a HK$6,000 scholarship, and the chance to gain work experience with a top financial institution.

To be eligible, entrants had to be full-time undergraduates in the first or second year of finance or business-related courses in Hong Kong. And while the contest was primarily designed to give students a chance to understand the full financial planning process, it also allowed them to learn more about organisation and teamwork, to improve their communication skills, and to develop greater self-confidence.

Confirming this, Li Yangmiao, who is now a second-year student in the business and economics faculty at the University of Hong Kong, said her team had many reasons for competing. The most important was being able to put into practice some of the theories learned in the classroom.

It took the team about two weeks during the summer holidays to discuss strategy and prepare their written plan. Since all four were in different cities at the time, they divided the responsibility for research and collecting data, and exchanged ideas online.

'We referred to financial planning websites and also looked at cases on some banking sites,' Ms Li said. 'The difficult part was the investment planning because that was where we generally lacked knowledge.'

They settled on a strategy that aimed for steady returns from mutual fund investments geared towards building a sufficient nest egg for retirement.

'We are quite confident of our results,' Ms Li said. 'It's been good fun, and I've already learned a lot from the experience.'

Mimi Yau Shuk-mei and her team also had clear objectives when they decided to enter the competition. 'We wanted to make our holiday more meaningful and learn more in an area related to our studies,' said Ms Yau, who is starting her second year at Polytechnic University's business faculty.

She said the prospect of winning an internship was also a big attraction. Her group split the case into four parts, reflecting each person's strengths, and later jointly reviewed everything before coming up with a revised final version.

'I did the insurance part,' Ms Yau said. 'And we knew one teammate was good at maths, so he did all the calculations.'

She said the biggest problem was interpreting the limited amount of information given in the case. 'That meant we had to think more carefully. As some points were not mentioned, we had to find things from the internet and apply them.'

The faculty had helped by providing a list of reference books and some basic guidance on analysing a case, but otherwise the students were on their own.

'We provided a lot of mathematical proofs, so we think our plan was comprehensive. As a result of the competition, we've all realised that we can do more to plan our personal finances.'

Jackie Wan Ka-shing, who has just started his third year studying finance at Baptist University, also felt that just taking part was a valuable learning experience.

'We learned a lot about fund performance and how to divide money into different categories for future expenses,' he said. 'We'll be happy to get to the second round, but if not, we'll still have gained something from the competition.'

He said his university had encouraged participation and wanted students to learn through the process.

In analysing the case, the team used the department's software, including a Reuters terminal, to research financial data and the pricing of funds. They also took a practical approach.

'One of the team had a friend now studying in Australia, so they could ask about tuition fees, air fares and other costs for education overseas,' Mr Wan said.

On the Web For the latest news, updates and competition results for the Financial Planner Awards 2007, jointly organised by the South China Morning Post and the Institute of Financial Planners of Hong Kong, go to

Case outline

For the competition, students had to prepare a comprehensive financial plan based on the following scenario:

Mr and Mrs Ho are both in good health and can expect to live to the age of 85. He is 48 and works as a senior technical officer earning HK$432,000 a year. She is a housewife, aged 45, with no regular income.

They have a 16-year-old son in Form Five, who has been diagnosed with attention deficit disorder with hyperactivity (ADDH), and a nine-year-old daughter in Primary Four, whom they hope to send to university in Australia.

Mr Ho plans to retire in 2014, relying on his pension, and expects to sell their apartment and to rent somewhere smaller in the New Territories. After retiring, he may teach squash and tennis to boost his income.

Mrs Ho plans to do further studies in theology, and Mr Ho would like to join her.