The head of the Financial Planning Standards Board has called for greater transparency, particularly in the way wealth management professionals are being paid. Wading into the fees-versus-commissions debate being fought among wealth-management professionals in Hong Kong, the board's CEO Noel Maye said the focus should be on whether consumers were given adequate disclosure about how their investment advisers were being paid, rather than whether one remuneration method was better than another. In Hong Kong, the typical practice is for financial planners to receive a commission from the products they sell. This is unlike other parts of the world, such as the United States, where it has become increasingly popular for advisers to be paid on the advice given, or as a percentage of the portfolio they manage. Calling for the sector to increase transparency, he said it was more important to empower the consumer with information about how much financial planners were being paid, how the payment was determined, and whether they had any conflicts of interest. It should be then up to the consumer to decide whether they were comfortable with a particular method. 'If the consumer says 'I am fine with paying a commission, I can see how much I am paying, and I can see where I am going', I don't want to be the one saying you can't,' Mr Maye said. He said it was also important for payment terms to be clearly written when consumers dealt with financial planners. 'I think, as a profession, we need to step out into the light,' he said. Mr Maye recommends financial planners clearly explain what is in the fine print of a contract. He noted that in some jurisdictions, even the planners themselves were unable to clearly demonstrate how their commissions were determined. While some consumer groups and the media believe the fee-based system helps avoid conflicts of interest, and be more straightforward, the important thing is for the market and regulators to make a commitment towards structuring the product-distribution channel. Mr Maye said in some countries, lawyers were paid on a consignment basis based on a favourable result - in essence a commission. Locally, the Financial Planning Standards Board licenses the Institute of Financial Planners of Hong Kong to maintain its popular certified financial-planner mark. The board is represented in 12 markets in the Asia-Pacific region, including New Zealand, Japan, South Korea, Australia, China, Taiwan, Malaysia, Singapore, Indonesia and India. Suggesting that Hong Kong's financial services sector was expected to play a role in shaping the industry elsewhere, Mr Maye said the city had served as a template for other Asian nations, such as Thailand and India, that sought to build a sophisticated financial planning industry. He cited the role of the Institute of Financial Planners of Hong Kong as being instrumental in the creation of the first truly cross-border certification programme with affiliates on the mainland and in Taiwan. However, Mr Maye believes Hong Kong's financial planning sector suffers from an overload of credentials - a problem not unique to the city. While some qualifications, such as certified financial planner, were genuinely useful, he pointed out there were others in the market which people could acquire simply for showing up to a course or networking event. '[For the certified financial planner qualification], people give up their weekends and evenings to study. It's a vigorous exam. It's a commitment to professional conduct and ethical behaviour, and once you get the mark you have to maintain it with continuous development,' Mr Maye said. 'It's a career commitment, not a marketing tool, and it's not something just to put on your business card. It's a way of retooling yourself as a professional adviser. 'Having a plethora of credentials is not exactly serving the consumer's interest,' he said, believing it would confuse customers. Taking medical and accounting qualifications as examples of readily recognised requirements, he said too many credentials would make it difficult for consumers to identify professionals who were competent and ethical. To that end, he said the board was trying to raise its profile through a global brand-recognition campaign, started earlier this year. Mr Maye, who has headed the Financial Planning Standards Board since 2003, described how interest in the financial planning profession was steadily growing in different parts of the world. First and foremost is an industry-wide change from a transactional model of doing business, towards focusing on the relationships between financial services companies and their customers. He said banks, brokerages and other service providers were moving towards building a deeper relationship with the client to serve more of their financial needs. In fact, some were seeking to serve multiple generations of the same family. On the subject of regulation, Mr Maye said watchdogs around the world were looking towards professional bodies, such as the Financial Planning Standards Board and its worldwide affiliates, to set standards for behaviour that were consumer-based and transparent, requiring disclosure of compensation and conflicts of interest. Planners should be 'fit and proper' - a notion based on whether the advice given was appropriate to the client. The push from regulators to focus on consumers was driving a need for financial planners to identify themselves as client-serving professionals, he said. At the same time, consumers are facing the erosion of concepts such as guaranteed government pensions and jobs for life. In their place is the added importance of personal responsibility. People are realising they need to be active participants in the planning of their futures. Ageing populations in Asia and around the world are creating a sandwich class of individuals who have to look after their parents and children. They have to balance planning for their own retirement, paying the costs of looking after the elderly, and their children's education. Opportunities were being created for financial planners to help people deal with making these financial decisions, Mr Maye said. He also said he expected increasingly younger people to look for financial planning services as the industry matured in Asia.