Financial Planning Essay

1046 Words May 2nd, 2013 5 Pages
|Topic: “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.” |

The financial 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 concept to a recognized specialty. However, this industry is still in a young stage so that there are some problematic issues concerned especially in some Asian districts like Hong Kong and China. It can be reflected particularly in the remuneration system and professionalization of
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These principles given by CFP Board aim to encourage public confidence to financial planning industry as well as explicitly identify practitioners’ responsibilities and obligations to different stakeholders. However, practicing these ethical principles in real world may not an easy task. The following part of the essay will examine 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 development opportunity for financial planning services had been witnessed. But at the same time, a higher expectation for quality 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 between clients and planners. These challenges are reflected particularly in the following aspects. Firstly, fee-based financial planning barely exists in Asia due to the low consumer acceptance degree, which most likely to lead to an issue of interest conflicts. A financial planner is commonly compensated by commissions from selling product quotas given by their companies and the selection of product may not be the best choice for clients. It also matters when considering the risk tolerance for financial planners’ income. Only

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