Financial Planning Essay

Financial Planning Individual Essay

“Describe the essential element to be a successful financial planner in Hong Kong and China. Explain the challenges of practicing ethical financial planning in Hong Kong and China.”

Only 19% of Hong Kong consumers are very confident that they will achieve their financial goals (IFPHK, 2015). Financial Planning is a huge market, with still a broad window to get clients; there is a need for financial planners and wealth managers. Indeed, 52% of Hong Kong consumers focus on managing their capital and their investment, and the three other central areas of focus are the real estate planning, managing their retirement plan and save money for the emergency. However, what makes a successful financial planner in Hong Kong? It appears that 56% of Hong Kong consumer consider trust as a crucial parameter. Thus, being a successful Financial Planner in Hong Kong comes primarily from the confidence between the parties. How establish a trusting relationship with clients? Three parameters are relevant, the knowledge, the reputation and the ethics.

Financial Planning requires an "All-around Knowledge"; Planners need to get knowledge in all aspects of the client's needs, whether they are financials but also psychological and physical. Plus, they need an understanding of various financial analyses and the economic environment, macro and micro. It is evident that significant skills in finance, theoretical and practical, is a necessity to earn the trust of a potential client.

The FPSB developed a framework of essential cognitive skills to be a successful financial planner within eight chapters. The cognitive skills are the fourth of the board's categories of professional skills, which are the Professional Responsibility, the Practice, the Communication and finally the Cognitive abilities. The cognitive class of capabilities enhance the ability to think widely from a variety of sources, the logic and the adaptability of thinking. Furthermore, the knowledge required isn't only the financial knowledge, but also the comprehension of the economic environment to adapt his solutions to the client's needs since the economic context has consequences on the clients' investments.

Finally, the knowledge of the client himself is a key. Knowing their habit of consumption, their life-plan like their retirement plan, but also their physical and psychological state is crucial. Mainly talking about wealth management, client's emotions impact the success of an investment strategy. For instance, Anthony J. Porcelli and Mauricio R. Delgado proved that the stress affects the financial decisions negatively (Porcelli & Delgado, 2009). With the life-planning concept, the financial planner integrated new parameters in the elaboration of the life-planning strategy, including personal goals and ambitions for instance. Cicily Carson Maton, CFP®; Michelle Maton, CFP®; and William Marty Martin, Psy.D. also developed the link between mental health considerations and Financial Planning, arguing that even though pathological behaviours are not the norm, everyone has a special relationship with money and that undoubtedly affect investment strategies. (Maton, Maton, & Marty Martin, 2010)