Hong Kong’s financial advisory market is still evolving and while we have moved on from the era of unregulated and unscrupulous financial advisers, the market is still heavily influenced by sales commission. Stewart Aldcroft assesses the experience in other markets and how this might play out in Hong Kong.
Asia, especially Hong Kong, has not yet had the debate that has occurred in many other locations, over whether there should be a commission-ban on the sale of financial products. When this occurs, there will likely be many different opinions, from within the financial services industry, depending on the perspective of the commentator. What is particularly interesting, however, is that in most locations where a commission-ban has been introduced, it was necessary for there to be changes in the regulations to ‘impose’ the ban, rather than to seek a consensus from the market to do it voluntarily.
Why is a Commission-ban of Benefit?
The usual argument is that financial advisers are influenced by the size of the commission they may receive for the sale of a financial product. This can lead to a choice of product that might be less suitable for a client than might otherwise have been the case. This has been a perennial problem in the investment linked insurance market, and in the mutual funds space it is something the Exchange Traded Funds providers cite, when comparing their products to mainstream mutual funds. Experience suggests a commission﹣ban would level the playing field for the benefit of the consumer. It was demonstrated in the UK that after the introduction of their commission ban, advisers did considerably increase their usage of ETFs over other mutual funds.
Another argument is that by placing a ban on commission, the overall cost to clients of the products they might use will be reduced. Again, this can be particularly applied to mutual funds, where the front-end load of 5% may be eliminated (thus becoming zero), and management fees reduced to reflect lower costs also. These lower costs have the benefit of increasing the amount available for investment return to the investor.
Why is Commission Important, and What is the Alternative?
The principal reason financial advisers seek and receive commission is to enable them to provide advice and guidance to their clients without charging fees. This has been the traditional way in which such advice has been supplied in many parts of the world. However, as clients become more sophisticated, they get a better understanding of the variety of costs and options involved in the provision of financial advice, so some resistance occurs. This initially takes the form of discounts off the amount of the front-end load for fund sales, reducing these to less than the usual 5% amount. Of course, for those that invest large amounts, they have far more negotiation power, and can reduce their loads substantially.
Another factor that has significant implications in the Asian region, is that there is still a high degree of client education required when providing advice and guidance, which takes time and needs to be paid for. Commissions do that, if a product is actually sold, but it still remains the case that many clients are ‘just looking’, and may not actually proceed, thus receiving their advice free of charge. This too incurs costs which need to be recovered.
It is generally believed that in Asia there is substantial resistance to clients paying a fee to receive their financial advice, which assumes they are more willing to accept the idea of there being a negotiable commission if they proceed. Often the debate also refers to the thought that fees are only paid to professional advisers, such as lawyers and accountants, which might be seen to be a negative connotation on whether financial advisers are “professional” or not.
The alternative to commissions is generally for there to be a fee being charged. Whereas the usual assumption is that this fee is paid “up front”, for those that provide advice on investments, it could more easily be paid as a percentage of the assets being advised, i.e. an “asset-based fee” that can be received by the adviser regularly over the time period of any investments advised upon. This is usually much more acceptable to clients, who understand that their advisers need to be remunerated, and to some extent incentivised, to provide continuous advice.
Will Asia Introduce a Commission-ban?
In some respects, it is an inevitable conclusion to the long-running saga. In both the UK (which introduced the ban from 2013, following the Retail Distribution Review) and in Australia also in 2013 following a similar government sponsored review, the commission-ban initially had a negative impact on the number of advisers in operation, with many ceasing to operate as a consequence. Other firms were able to take advantage of this, having prepared their businesses in advance of the introduction, and acquired clients, advisers and firms accordingly.
n my view, for what it is worth, any ban would most likely need to be done in the form of a coordinated approach between the Securities Regulators of the region. Thus, most likely, Singapore, Hong Kong and Taiwan would need to do this together, for there to be anything achieved effectively.BM
The views expressed in this article are Stewart Aldcroft’s own and do not reflect Citi policy.
富通保險憑藉積極嶄新的社交媒體宣傳策略，勇奪2014 「指標社交媒體年獎 (保險) – 傑出成就獎」。首席市務總 監任佩儀表示：「富通保險本著銳意創新及具前瞻性的品 牌理念，積極運用最新技術，推出了一系列嶄新的市場推 廣活動，不斷提升富通保險品牌的形象及市場定位。」
富通保險利用不同的最新手機應用技 術，例如Zappar 3D手機程式，以親歷 其境般的生動形式將品牌訊息傳遞予目 標客戶群，增加用戶的互動體驗。透 過數碼遊戲，港鐵乘客可以利用智能手 機，輕鬆掃描港鐵及機場快綫站內富通 保險宣傳海報上的QR、Zap條碼，或輕 拍啟動NFC程式，即時掌握保健資訊及 產品計劃。
「為配合公司冠名贊助的『富通保險 Touch Mi鄭秀文世界巡迴演唱會香港 站』的推廣，我們也推出了全新宣傳攻 勢，結合HTML5手機網頁技術，讓客戶 可以透過輕擦手機熒幕贏取數碼擦擦卡 內的豐富獎品。」
「同時，我們亦積極將公司的宣傳攻 勢與社交媒體結合，利用『富通保險 Facebook專頁』，更好地與目標客戶群 進行互動交流」，任佩儀說。
對於富通保險這一環球品牌成功扎根亞 洲市場所面臨的挑戰，任佩儀有以下見 解：「富通為國際保險集團，擁有190 年豐富保險經驗，位列歐洲20大保險公 司之一，業務集中於佔全球保險業最大 份額的歐洲及亞洲巿場。富通保險是富通集團的全資附屬機構，並為香港最大 的壽險公司之一。」
「作為一個環球品牌，要成功立足亞洲 市場最大的挑戰是如何透過本地化的 詮釋，將品牌核心價值有效地傳遞至目 標客戶群。首先，我們需要緊貼市場 脈搏，發掘客戶的真正需求。結合環 球優勢和本地市場的豐富經驗，富通保 險為客戶提供多元化的保險及理財規劃 服務。」
「富通專注為世界各地的客戶提供專業 可靠的保障，而『本地化』亦是我們 2015願景的其中一個核心價值。因應 每個市場的不同文化背景及需求，我們 會作出相應的市場定位從而更有效地融 入本地市場。因此，富通保險透過積極 贊助本地大型活動，強化作為大眾『專 業理財夥伴』的品牌定位。同時為增加 品牌知名度及大眾對品牌的喜愛度，公 司邀請以正面形象及聰明才智而廣受歡 迎的香港藝人黃子華先生，擔任富通保 險的本地代言人。」
富通保險致力打造綜合社交平台，現 時品牌Facebook專頁擁有超過6,200名 活躍用戶。為了增加品牌在數碼平台的覆蓋率，品牌亦發起一浪接一浪的宣 傳攻勢。
任佩儀表示：「配合公司眾多大型贊 助活動的宣傳攻勢，我們透過Facebook 專頁將一系列最新的互動資訊與粉絲分 享，包括前期製作花絮、競猜遊戲及宣 傳影片，更會透過發佈小型遊戲活動送 出免費演唱會門票，從而增加社交用戶 與富通保險之間的互動交流。」
富通保險積極嘗試以不同的形式，例如 透過Facebook主頁頁面或者分頁程式， 為粉絲提供互動遊戲。每個遊戲亦同時 均以標註或者推薦好友參加遊戲的方 式，不斷增加受眾對品牌的認知度。
「在我們早前推出『富通保險Touch Mi 鄭秀文世界巡迴演唱會香港站』的手機 『數碼擦擦卡』遊戲當中，我們將短片 及問答遊戲結合HTML5手機網頁技術， 讓客戶可以透過『輕擦』手機熒幕贏取 『數碼擦擦卡』內的豐富獎品。在短 短三個星期內已經有超過15,000人參與 遊戲。」
亞洲擁有龐大的智能手機及網絡程式的 用戶市場，而香港作為世界最發達的手 機通訊市場之一，若不計無綫網絡，市 場上約有一千六百萬的流動電話使用 者，其中有超過一半是3G/4G 用戶。
為了緊貼數碼新趨勢，與客戶建立更緊 密關係，富通保險會定期以eDM形式與 客戶分享實用的最新資訊。
「我們希望透過分享最新的實用資訊以 履行對客戶『專業理財夥伴』的品牌承 諾。同時，我們亦會透過一系列獎賞計 劃回饋客戶，從而增加銷售機會。」
此外，公司亦積極開發手機應用程式， 讓理財顧問與客戶作互動交流，輕鬆分 析理財需要。
「我們亦加強在數碼媒體上的宣傳力 度，透過例如網上的贊助廣告以及橫幅 廣告，增加品牌在網上的知名度。在社 交媒體宣傳方面，我們同時亦會積極 利用不同的檢測工具，追踪市場需求變 化。」任佩儀說。
最後，任佩儀作出以下總結：「富通保 險秉持以客為先的信念，緊貼市場脈 搏，冠名贊助高爾夫球賽、演唱會及楝 篤笑等大型活動，從而攻佔高端客戶市 場，宣揚保險及理財規劃的重要性，成 功打造卓越品牌。」BM