Ready to ride the dragon

3-MIN READ3-MIN

Published: 12:00am, 7 Jan 2012

Escalating numbers of wealthy mainlanders with ties to Hong Kong are expected to create opportunities for financial planners and wealth managers with the necessary experience and training. According to the Boston Consulting Group, the level of wealth creation in China is growing at a very noteworthy rate of nearly three times the global average.

In its recent 'Wealth Report on Asia', Swiss private banking group Julius Baer concluded that China will have as many as 1.4 million high net-worth individuals by 2015.

According to the standard used by the lender, each will have investable assets of at least US$1 million (HK$7.8 million) and as a group will account for US$8.76 trillion (HK$68 trillion) in wealth by 2015. Adding to this, many in the wealth-management business believe that the increasing liberalisation of the yuan and potential easing of capital controls over the coming years will spur even more opportunities to tap into this multitrillion-dollar pot.

While the mainland may be minting millionaires at an unprecedented rate, financial planning is still at an early stage. 'At the moment, wealth-management education is our primary focus,' says Thomas Tang, a private client services manager at ipac Financial Planning.

In addition, Tang notes that the financial group's internal training emphasises teaching clients to navigate the emotions triggered by market volatility - namely, adjusting goals.

The education process also focuses on holistic financial planning. Tang says it is customary to have as many as four meetings with a potential client to fully understand his circumstances, needs, risk profile and objectives, before any mention of a financial plan is even mentioned, let alone implemented.

Another factor fuelling wealth-management opportunities is the increasingly favourable regulatory environment that's emerging. As China's central authorities gradually relax operating and service restrictions on foreign banks, private and multinational institutions seem to be quickly responding, by way of expansion.