Financial Planning Essay

Topic Describe the of the essence(p) element to be a successful fiscal planner in Hong Kong and China. Explain the ch all in allenges of practicing ethical fiscal provision in Hong Kong and China. The monetary climate is changing constantly with the changing of numerous influential factors. Financial planning is one of the financial industries which gradually developed from a vague idea to a recognized specialty.However, this industry is still in a youth stage so that there argon somewhatwhat problematic issues concern especially in some Asian districts like Hong Kong and China. It gutter be reflected particularly in the remuneration system and professionalization of financial planners as well as public recognition for this industry. To reach a progress direct, the first step is establishing a public self-assertion. Therefore it is emergent for financial planners to think about how to lead successful. As the role of processing clients makes some most important decis ions of their lives, financial planners are required to satisfy a specific set of essential elements.The first and as well as the most staple fibre requirement for them is strong professional knowledge. Financial planners should be able to fulfill a comprehensive process when help clients create financial plans and estimate financial products packages indep finisently to satisfy clients need. Well-rounded professional knowledge in varied fields is significant at the moment which including not completely the financial associate areas such(prenominal) as economics, business management, and investment, insurance yet also some some other non-financial related areas such as psychology and sociology.Having the general base knowledge is the start but not the end in the career so that many financial planners are expect to have an expertise in particular field which can help them directly take an advantage position in satisfying some specific clients need. Take the insurance plann ing as an example a financial planner who is expertise in the insurance industry as well as having the basic all round knowledge ordain be most likely to gain the clients trust.In sum, the ongoing learning is also essential since the financial environment is changing every day and all the decisions should be made according to the particular background environment. The Mainstays survey in 2006 designates that 85 percent of the population wants financial planners who are knowledgeable, skilled, and actually care beyond the transaction. And there are also other researches and evidences indicate that social skills are more important than technical expertise at most times.In this sense, the ability to have emotional resonance with clients and show ones sincere and caring attitude would be crucial to attract new clients and establish a unyielding term relationship with existing clients. Also it is applicable in making financial plans and implementing related strategies because client s assistances and cooperation play a significant role in the process. This implication can be obviously reflected in the second step of a black-tie personal financial planning process, gathering client data and ascertain goals.When communicating with clients, an excellent financial planner would be able to protract useful information to understand the clients motivation as well as manage their expectations. It is no doubt that a ripe(p) reputation is the most valuable thing for financial planners. In addition to professional knowledge and strong interpersonal skills, ethical behavior is a great concern. Proposed ethical behavior standards are based on convention of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence.These principles given by CFP Board aim to encourage public self-reliance to financial planning industry as well as explicitly describe practitioners responsibilities and obligations to different stakeholders. However, prac ticing these ethical principles in real world whitethorn not an easy task. The following part of the essay will attempt the challenges of practicing ethical financial planning in Hong Kong and China. With rapid wealth accumulation and increasing investor demand in Hong Kong and China, a higher potential precept opportunity for financial planning services had been witnessed.But at the same time, a higher expectation for caliber financial planning with insufficient confidence from the pubic becomes a source of challenges for this industry. It appears to be tougher when considering the implementation of ethical financial planning since the nature of the industry is based on trust amid clients and planners. These challenges are reflected particularly in the following aspects. Firstly, fee-based financial planning only exists in Asia due to the low consumer acceptance degree, which most likely to cover to an issue of interest conflicts.A financial planner is commonly compensated b y commissions from selling product quotas given by their companies and the selection of product whitethorn not be the best choice for clients. It also matters when considering the risk valuation reserve for financial planners income. Only commission-based compensation may result in unethical behavior in effect(p) by financial planners to survive because of sharp omit in income during the business recession. Secondly, it is challengeable for financial planners to offer high quality services without sufficient confidence and trust from clients.Financial planners must have of late understanding about their clients financial status, needs and concerns in order to give desirable advices. However, most Chinese consumers are not willing to offer their private information to people whom they are not familiar with, which make it difficult to decide the initial plan and identify the expected outcomes. It is true that an excellent financial planner should have the interpersonal skills of e ncouraging clients to provide related information as much as possible.The contention about what degree an planner should pursue discovery conversations and how to discharge the ethical position when making effort to gain the consumer information is concerned. Finally, the level of knowledge and education of financial services to the public are comparatively low in districts for some undeveloped cities in mainland China, which may become a kind of misguided incentive of unethical behavior to financial planning services providers affected by the poor review utensil and lapses of checks.It can be strongly reflected in the fairness issue such as disclose of information between planners and clients It will take long for this industry to develop mutually, some improvement measures can be practiced now. Efforts could be focused on several aspects including the closely supervise of sustain governance, adequate training for practitioners competence and professionalism, as well as the educ ation for the public.