Hong Kong-based Convoy, an independent financial adviser, is exploring new business opportunities in China, Malaysia and Thailand. "There are now more new millionaires in Asia than in the United States, but few qualified financial intermediaries," says Ernest Chang, the firm's executive director.

Convoy was established as a risk manager for insurance companies in 1992, but was perhaps too successful, and eventually found its services were no longer required. The Asian financial crisis brought an unexpected chance to resurrect the company as a financial adviser - by 1998, Hong Kongers had learned the hard way that property and stocks are not a good way to plan for the future.

Today the firm is a mid-sized player in what is still a modest industry. With HK$1.5 billion ($190 million) of assets under advisement, it has carved a niche servicing Chinese-speaking people in a world previously dominated by firms catering to British expatriates. Its clients' wealth ranges from HK$500,000 to HK$20 million, and most are youngish professionals. The first four years of advisory business saw Convoy double its growth each year.

That pace has slowed, however. As Convoy has grown into a mid-sized player in the IFA space, it increasingly finds itself squeezed between retail banks from below, and private banks from above.

As commercial banks tighten their stranglehold on funds distribution, it forces IFAs to upgrade the services they provide. IFAs have a natural advantage in their independence, but they must also do more in research and customer service. "We have to look like a private bank," Chan says, noting Convoy has just installed a new CRM system, and will launch an online valuation system in December. These things don't come cheap.

The best way to return to the breakneck speed it enjoyed from 1997-2001 and mitigate the costs of upgrading service is to expand beyond Hong Kong, Chan says.

Convoy is now exploring partnerships with financial institutions such as securities houses in several countries. There is at best an embryonic IFA industry in places like Malaysia and China. Convoy believes it can bring a local broker or insurance company financial planning expertise; in turn it wants access to customers. "These institutions see a market among their own clients, but they don't know how to start," Chan says. "They don't have the technology or the mentality. It's a tough business, but it's interesting."