The Hong Kong Securities Institute (HKSI) has tailored and launched an international training programme in the city to address a recognised skills shortage in the wealth management sector.
Ironically, the HKSI sought to introduce this initiative six years ago, but failed to receive enough industry support during what was private-banking boom time. The 2008 financial crisis changed all that, revealing those organisations that put profits before good practice.
But this April, after months of negotiation, HKSI signed an agreement with the Swiss-based Association of International Wealth Management (AIWM) enabling it to be the first organisation in Asia to offer the Certified International Wealth Manager (CIWM) programme.
This scheme has been available in Switzerland for six years, and in January was adopted by the British Bankers’ Association. It is also run in Germany, France, Italy and Luxembourg.
In tandem, the HKSI is also running a tailored course to ensure participants understand industry rules and regulations across Greater China, key products in the Asian marketplace, notably structured products, and learn the soft skills that a relationship manager requires to be effective.
It could be argued that Hong Kong is behind the curve, given that rival private banking hub Singapore launched a training programme several years ago through Temasek’s Wealth Management Institute.
But Anthony Muh, chairman of the HKSI, notes that its tie-up with Switzerland’s AIWM offers international credibility and, more importantly, this Hong Kong initiative is industry-driven rather than a state-sponsored scheme.
He raises three points to explain the city’s need for this initiative. Firstly, it seeks to address the shortage of qualified advisers and private bankers in a region that has witnessed an explosion in the number of high-net-worth individuals, particularly in China.
Secondly, he notes that Hong Kong has been designated as China’s international asset management centre, and as such there is an increasing need to source more assets into Hong Kong to incentivise asset managers to come and manage money in the city.
Lastly, he sees the scheme as an important stepping stone for Hong Kong to sustain itself as a major financial hub.
“Here in Hong Kong we have a very successful capital market, and we have the very best of intermediaries here. But the most important box to tick in terms of long-term sustainability is the domestic savings pool, and this is where Hong Kong does not quite fit the bill today,” says Muh.
He notes that the market capitalisation of Hong Kong is eight times the size of its GDP, against a global average of one-to-one (or at most, two-to-one). “As China’s international asset management centre, Hong Kong ought to be its wealth management centre as well. We need to help accumulate more assets here for the sustainability of the whole industry,” he stresses.
The CIWM is a diploma aimed at financial, legal and other professionals in the wealth management industry or those keen to develop knowledge in this area. It comprises two levels: a foundation exam and a final exam, the latter of which requires a minimum of three years’ work experience or a relevant professional qualification or degree.
The HKSI recognises that a number of wealth management businesses already run in-house training programmes. As such, it is providing an accreditation process to approve such schemes run in Hong Kong.
As evidence that this process is industry driven, the HKSI has established an ad-hoc committee for the Competency Guidelines for the Private Wealth Management Industry in Hong Kong that includes senior representatives from most of the global, regional and local PWM firms.
Through development of this scheme the HKSI has engaged the Securities & Futures Commission (SFC) and the Hong Kong Monetary Authority, both of which are supportive, says Muh.
Hong Kong’s financial services and treasury secretary KC Chan applauds HKSI's move, adding: “The development of competency guidelines for PWM professionals will help strengthen Hong Kong’s position as a leading international financial centre.”
The HKSI was set up during the Asian financial crisis as a not-for-profit professional members organisation and was handed HK$15 million in seed capital by the SFC, which it says it has not used. It has 200 corporate members, 2,000 individual members and 20,000 student/junior members.