Independent financial advisers (IFA) are finding it difficult to grab a greater slice of the financial planning market in Hong Kong because they lack the back-end support and infrastructure that banks and insurance companies have invested in, according to platform provider iFAST. Hong Kong is branded as one of Asia's leading financial hubs with established financial infrastructure, but Lim Chung Chun, chairman and chief executive of iFAST, believes there is still a long way to go for IFAs here. Compared with Singapore, development of the IFA profession is still in its infancy. Founded in 2000, iFAST is the largest unit trust investment platform in Singapore. It opened its first overseas office in Hong Kong last year. The company is one of the lead sponsors of this year's SCMP/IFPHK Financial Planner Awards, representing the IFA sector. 'The history of the IFA profession in Singapore has been shorter when compared to Hong Kong, but the Singapore market bears a stronger and more aggressive growth,' Mr Lim said. 'Before 2002 the insurance broking industry was quite small with only 300 representatives in Singapore. With the advent of the Financial Advisers Act, the insurance broking firms became the first group of IFA firms that handled investment products in addition to insurance products. Today, the IFA industry has more than 2,000 representatives ... and accounts for 40 per cent of the unit trust pie. 'Thanks to the launch of business-to-business [B2B] and business-to-consumer [B2C] business online models, [they] meet the needs of both do-it-yourself [DIY] investors and those who need professional advice from IFAs.' Mr Lim said it was a different story in Hong Kong. 'IFAs don't get a slice of the pie in terms of market share in Hong Kong. More than 80 per cent of sales are processed by banks. IFAs are unable to make a bigger impact because of insufficient back-end support. 'For example, IFAs [in Hong Kong] do things more on their own, which means low efficiency and high daily administration costs. For instance, they deal with different funding companies, research and even prepare performance reports for clients. [Because] they either do not have enough time to push [for] more new business [or have] the resources, such as online platform development, [they are at a disadvantage compared with the banks].' According to The Institute of Financial Planners of Hong Kong's 2006 Intermediaries Survey, there are 1,409 companies and about 65,000 financial practitioners across the banking, insurance and IFA sectors. There is no official breakdown for the number of IFAs in Hong Kong. There may be a greater demand for the services of IFAs in Hong Kong, which has a bigger and a more competitive financial environment than the Lion City. Mr Lim said he would like to see IFAs in Hong Kong play a greater role as the industry became more advisory based. 'Some gradual changes would need to take place. The remuneration model for instance needs to change towards an income stream which is more long term and recurrent in nature, and more tied to the assets under management that each individual end client has,' Mr Lim said. Right now, 5 to 10 per cent of mutual fund investors bypass the middle man and purchase their financial products directly online. In the long term, iFAST predicts that the trend of direct online investing will rise. 'We believe that as much as 20 per cent of investors will become DIY investors and transact online, and [the remaining] 80 per cent of investors will need advisory services and buy mutual funds via banks and IFAs. We aim to help the IFAs increase their competitiveness against personal bankers who are well-supported by technology, infrastructure and support,' he said. Last year, iFAST launched Funsupermart.com, an online distributor of unit trusts aimed at direct investors, in Hong Kong. This month iFAST will add a B2B business platform to boost IFA companies. The new solutions allow financial advisers and institutions to gain access to a wide range of unit trust products and mutual funds. Other benefits are round-the-clock access to consolidated statements, calculations of their trailer, commissions and other fees. IFAs will also have access to a wide range of products, information, research, technology and business development services. 'As the internet becomes more stable and reliable, attracting more transactions, the B2C business model is emerging in many countries. It's difficult to predict how that will affect investors' choices of channels - banks, online or IFAs - because it all depends on the sophistication of investors,' Mr Lim said. Investing online may be convenient, but investors still have to do their own research and then decide whether to buy or sell. Face-to-face consultation with an IFA, or intermediate party, will mean personal services for busy individuals seeking unbiased advice.