Personal Financial Planning

Lecture 1
• Introduction
C ONTENTS

• The Business
• The Course
• Chapter I: The Wealth Management Process
• Wealth Management Platform
• Topics on family office
• Chapter II: Fiduciary and Professional Standards
• Special topic: How to become a successful wealth manager?
 Who should take the course?
Who are recommend to take the Who are not recommend to take
course the course

 Work as a financial planner or wealth  Work as a portfolio manager in asset

manager in private bank or private wealth management companies.
management department.
 Be a top trader or market wizard
 Make financial plan and manage wealth for
you or your family.  Incident or change on course schedule

 Plan to set up a family office.

Wealth management is your lifetime job.

Wealth management is the final job in your life.

You can check out any time you like, But you can never leave
 Character of Wealth manager

 Comprehensive
 the scope of advisement extends far beyond the management of a fixed sum of financial
assets.
 Incorporates a client’s implied assets, such as expected retirement benefits and the value
and character of the earnings
 Customized
 Complex: people business
 Always remember: You are not a babysitter. You are an advisor.
 Wealth manager vs Asset manager
Wealth Management Asset Management

Scope Comprehensive Focused

Life balance sheet Financial assets

Management Customized Standardized

Approach Orientation toward client goals Orientation toward relative returns
After-tax wealth accumulation Periodic pretax returns
Client Profile Complexity of the individual Few constraints
Diversity of client goals Homogeneous
Limited investment sophistication High investment sophistication
Psychological/behavioral profile Psychology neutral
Investment Dynamic Static
Constraints Finite or multistage Infinite
Tax aware Tax neutral
• Introduction
C ONTENTS

• The Business
• The Course
• Chapter I: The Wealth Management Process
• Wealth Management Platform
• Topics on family office
• Chapter II: Fiduciary and Professional Standards
• Special topic: How to become a successful wealth manager?
Introduction to Asset and Wealth Management

Business in Hong Kong

 Job hunting strategy: Be first, be top, be strategic

Source: Oreopoulos, P., Wachter, T. von, & Heisz, A. (2012). The short- and long-term career effects of graduating in a
recession. American Economic Journal. Applied Economics, 4(1), 1–19. https://doi.org/10.1257/app.4.1.1
Be strategic

Market Size Participates Suitability

 Asset and Wealth Management Market in Hong Kong

Source: Asset and Wealth Management Activities Survey 2023, Securities and Futures Commission
 Asset and Wealth Management Market in Hong Kong

Source: Asset and Wealth Management Activities Survey 2023, Securities and Futures Commission
 Asset and Wealth Management Business

 The AUM of Hong Kong’s asset and wealth management business

amounted to $31,193 billion (US$3,993 billion) as at 31 December 2023,
representing a 2% year-on-year increase.

 Net fund inflows of $389 billion (US$50 billion) were recorded for the asset
and wealth management business during 2023.

 Assets from non-Hong Kong investors amounted to $19,357 billion as at 31

December 2023, representing 64% of the asset and wealth management
business. These assets have consistently accounted for 64-65% of total
AUM in the past five years.

 Assets from investors outside Mainland China and Hong Kong amounted to
$16,452 billion as at 31 December 2023, representing 54% of the asset and
wealth management business.

 The total number of staff engaged in asset and wealth management activities
was 53,883 in 2023.

Source: Asset and Wealth Management Activities Survey 2023, Securities and Futures Commission
 Asset Management and Fund Advisory Business

 The asset management and fund advisory business recorded a year-on-year

AUM increase of 3% to $23,060 billion as at 31 December 2023 and net
fund inflows of $48 billion for 2023. The growth in AUM was largely
driven by an increase in the values of clients’ portfolio assets, coupled with
net fund inflows.

 The asset management and fund advisory business is carried out by licensed
corporations, registered institutions and insurance companies. The fund
advisory business mainly comprises institutional fund advisory services
provided from Hong Kong to overseas management firms.

 Assets managed in Hong Kong made up 55% of the AUM of the asset
management business , and 45% of these assets were invested in equities as
at 31 December 2023.

 The number of firms licensed to carry out asset management (Type 9

regulated activity) in Hong Kong increased by 3% from 2,069 to 2,127
during 2023.

Source: Asset and Wealth Management Activities Survey 2023, Securities and Futures Commission
 Private Banking and Private Wealth Management Business

 The private banking and private wealth management business includes the
asset management services provided to private banking clients by licensed
corporations and registered institutions. As at 31 December 2023, the total
assets of this business increased from the previous year by 1% to $9,022
billion . Net fund inflows amounted to $341 billion in 2023. The increase in
AUM was mainly due to net fund inflows, and partially offset by negative
changes in the values of clients’ portfolio assets.

 A total of 59 licensed corporations and 44 registered institutions reported

that they had conducted private banking or private wealth management
business during the survey period.

 As at 31 December 2023, the total number of staff engaged in the private

banking and private wealth management business was stable at 10,401, of
which 3,422 were Private Wealth Management Relevant Practitioners.

Source: Asset and Wealth Management Activities Survey 2023, Securities and Futures Commission
 Asset and Wealth Management Business of Mainland-related LCs and RIs
 The AUM of the asset and wealth management business of Mainland-related LCs and RIs increased 4% year-on-year to $2,676
billion, and recorded net fund inflows of $153 billion, up 16% from 2022. Their AUM showed a growing trend, up 50% since 2019.

 There were 149 Mainland-related LCs and RIs engaged in asset and wealth management business. Their staff increased 2% year-on-
year.

Source: Asset and Wealth Management Activities Survey 2023, Securities and Futures Commission
Why Wealth Management?

Piketty (2014) and Piketty and

Zucman (2014) argue that inequality
and wealth-to-income ratios in
advanced economies have followed a
U-shaped pattern over the past century
and a half. They further hypothesize
that wealth inequality may continue to
rise in the future, along with a
predicted decline in the rate of
economic growth. The main
theoretical argument for this comes
about from a simple relation: r > g. In
their approach, a higher spread
between the real rate of return on
wealth, denoted r, and the rate of real
GDP growth, g, tends to magnify the
steady-state level of wealth inequality.
Why Wealth Management?
 Why Hong Kong?

Reference:
Thomas Philippon, Ariell Reshef, Wages and Human Capital in the U.S. Finance Industry: 1909–2006*, The Quarterly Journal of Economics, Volume
127, Issue 4, November 2012, Pages 1551–1609, https://doi.org/10.1093/qje/qjs030
Koo, R. C. (2022). Pursued Economy: Understanding and Overcoming the Challenging New Realities for Advanced Economies (1st ed.). Wiley.
• Introduction
C ONTENTS

• The Business
• The Course
• Chapter I: The Wealth Management Process
• Wealth Management Platform
• Topics on family office
• Chapter II: Fiduciary and Professional Standards
• Special topic: How to become a successful wealth manager?
 Introduction

 What is Personal Financial Planning?

 Who should make plan?
 Why planning?
 When to plan?
 Where to plan?
 How to plan?
 Introduction – What?

 What is Personal Financial Planning?

 Personal Financial Planning is the development and implementation of total, coordinated plans
for achieving one’s overall financial objectives.
 The term private wealth management also is increasingly being applied to this process,
particularly when it involves larger investment portfolios and estates.

Financial Achieve
Goals the Target

Financial
Instruments
 Introduction – Who?

 Who should make plan?

 Some of the more sophisticated wealth management techniques tend to be used mainly by those
with high incomes and large property or business interests, but partly this is so because less
wealthy persons may lack information about financial planning.
 Our economic growth, the tax structure, the fact that two-income-earner families are now the
norm, and other social and economic changes have tremendously increased the need for and the
complexity of financial planning.
 Introduction – Why?

 Why planning?
 Meet a person’s or family’s overall financial objectives.
 Capital Accumulation
 Investment and Property Management
 Tax planning
 Retirement Planning
 Protection Against Personal Risks
 Introduction – When?

 When to plan?
 People deal with their
objectives over their entire
economic life cycle.
 Never too early
 Never too late
 Read: Lifetime Financial
Advice Human Capital, Asset
Allocation, and Insurance
(Roger G. Ibbotson, Moshe A.
Milevsky, Peng Chen and
Kevin X. Zhu)
 Introduction – Where to plan?

 Where does people like to discuss their financial plan with their advisor?
 Introduction – How?

Course Objectives:

The objective of this course is to offer a theorical and practical training of financial
planning and wealth management for High Net Worth Individuals (HNWIs) and their
families. It covers important concepts related to principles, risk profiling, investment
analysis, asset allocation and the latest issues related to financial planning and wealth
management.
Soft skill training and real-world situation cases and experience are throughout the whole
courses. The students are expected to be well prepared as an eligible personal financial
planner after taking this course.
 Introduction

Required Textbook:
Evensky, Harold, Horan, Stephen M, and Robinson, Thomas R. The New Wealth
Management. 1. Aufl. ed. New York: Wiley, 2011. CFA Institute Investment Ser. Web.

Reference Book:

The Financial Planning Workbook: A Comprehensive Guide to Building a Successful

Financial Plan (2024 Edition)
 Introduction
Assessments:

Class Participation 5%
Quiz 15%
Project 30%
Final Examination 50%
100%
Exams:
The in-class quiz and the final exam will last for 1 hour and 3 hours, respectively. The final exam will cover the
entire course. The quiz and final exam will be open book (subject to approval).

Project:
The project will be on individual basis according to the enrollment. Each student will have a case about the
background and investment objectives of a private investor. You are required to make a 20-minutes presentation
and 10-minutes dry run as a financial advisor.
 Calendar

Jan 18 Lecture 1 BC303 Mar 8 Lecture 7 BC303

Jan 25 Lecture 2 BC303 Mar 15 Lecture 8 BC303
Feb 1 No lecture BC303 Mar 22 Lecture 9 BC303
Feb 8 Lecture 3 Lunar New Year Break Mar 29 Lecture 10 BC303
Feb 15 Lecture 4 BC303 Apr 5 Project Presentation BC303
Feb 22 Lecture 5 BC303 Apr 12 Project Presentation BC303
Mar 1 Lecture 6 BC303
& Quiz
 Highly Encouraged: Hang the teacher on the blackboard

 Be critical thinking. Challenge me!

 Ask tough questions.
• Introduction
C ONTENTS

• The Business
• The Course
• Chapter I: The Wealth Management Process
• Wealth Management Platform
• Topics on family office
• Chapter II: Fiduciary and Professional Standards
• Special topic: How to become a successful wealth manager?
 Chapter1: The Wealth Management Process

The responsibility of advisors revolves around both helping families to keep doing the
“right” thing and providing them with as much comfort as possible in doing so.
- Jean Brunel
Chapter1: The Wealth Management Process

 (1) Client Relationship  (3) Investment Policy

 (2) Client Profile  (4) Portfolio management, monitoring and review

 1.1 The Client Relationship

 The overall wealth management investment process is recursive and ongoing

 Continually collecting data
 Education is important for developing a strong relationship and ensuring that the advisor and
client are speaking the same language.
 The process in general
 Possible investment alternatives
 The purpose of chosen investment strategies
 Techniques for data-gathering and education
 1.2 The Client Profile

 Client Goals
 Return
 Wealth Transfer
 Risk Management
 Managing family dynamics
 Preparing for charitable donation
 1.2 The Client Profile

 Determine a client’s risk tolerance

 Review past investment behavior
 Questionnaires and interviews
 Holistic experience with the client
 Understanding of the client’s lifestyles and habits
 1.2 The Client Profile

 Behavioral Biases
 Client Constrains
 Time horizon
 Priority
 Liquidity requirements
 Legal considerations
 Taxes
 Unique circumstances
 Identify the real constrains
 1.2 The Client Profile

 Life Balance Sheet

 Financial asset
 Tangible asset
 Implied asset:
e.g. human capital,
expected pension
benefits
 Explicit liabilities
 Implied liabilities
 1.2 The Client Profile

 Stylistic Depiction of Financial

Capital and Human Capital
 Industry
 Inflation
 1.2 The Client Profile

 Tax Profile
 Varying tax brackets
 Alternative tax structure
 Taxation of retirement benefits
 Other tax considerations
 Low-cost-basis stock
 Estate taxes
 1.3 Wealth Management Investment Policy

 1. Framework of Investment Policy Statement

 a. Brief client description
 b. Client Goals
 c. Investment objectives
 i. Return objective
 ii. Risk objective
 d. Investment constraints
 i. Time horizon
 ii. Tax considerations
 1.3 Wealth Management Investment Policy

 d. Investment constraints (cont.)

 iii. Liquidity needs (e.g., cash flow management)
 iv. Legal and regulatory concerns
 v. Unique circumstances
 e. Strategic asset allocation
 i. Asset class constraints
 ii. Investment constraints (e.g., margin restrictions)
 iii. Investment strategies
 iv. Investment styles
 1.3 Wealth Management Investment Policy

 f. Implementation, monitoring, and review

 i. Responsibilities of client, manager, custodian, and other parties involved
 ii. Performance measures, evaluation, and benchmarks
 iii. Review schedule
 iv. Rebalancing guidelines
 1.3 Wealth Management Investment Policy (cont.)

 2. Risk management and insurance

 a. Longevity risk (i.e., the risk of living too long)

 b. Mortality risk (i.e., the risk of dying too soon)

 c. Medical, disability, and long-term care (i.e., the risk of living with costly illness)

 i. Living wills

 ii. Health care proxies

 d. Property risk (e.g., asset protection from creditor claims)

 e. Business risk

 f. Political risk

 g. Legal risk
 1.3 Wealth Management Investment Policy

 3. Wealth transfer goals

 a. Estate planning (e.g., transfer to heirs)
 b. Charity
 c. Business succession
• Introduction
C ONTENTS

• The Business
• The Course
• Chapter I: The Wealth Management Process
• Wealth Management Platform
• Topics on family office
• Chapter II: Fiduciary and Professional Standards
• Special topic: How to become a successful wealth manager?
 Wealth Management Platform

Immigration
Security Structure Financial
Mutual Funds Alternatives Inheritance &
Trading Product Advisor
Real Estate

Equity Trading Equity Equity Funds Hedge Funds Family Trust Syndicated Loan United Kingdom

Fixed Income Credit Fixed Income Funds Private Equity Life Insurance Mezzanine financing Japan

IPO and Placement FX ETF Private Debt Annuity/Saving Plan M&A financing Europe

Financing Interest Money management Mezzanine Key Man Insurance Property financing Australia

Block trade Participation Industry and Thematic REITS Critical illness Cross-border financing

Cross trade

Options & Futures

DIVERSIFIED CROSS-BORDER MULTIASSET Immigration

Overseas study
 Margin Finance Profit and Loss

Introduction

Margin finance allows investors to buy securities by borrowing

money from a broker.

Characters
 Flexible
 Interest is daily accrued to margin account
 Listed asset only

Indicative Term Sheet

Equity Stock A Initial Stock price Initial Stock price
rise 25% decline 25%
Shares 1,000,000 shares Scenario Analysis
Price HKD 10
Market value HKD 10M Equity Price Rate of
Market value Interest P/L
at Initial Return
LTV 50%
Principle HKD 5M $12.5 $12.5M $(0.25M) $2.25M 45%
Marginable Amount HKD 5M
$10 $10M $(0.25M) $(0.25M) -5%
Interest 5% p.a.
LTV LTV = 50% $7.5 $7.5M $(0.25M) $(2.75M) -55%
 Equity Leveraged Note
Introduction Structure

The return on a structured note is linked to the performance of (3) Interest payment date – pay interest
an underlying asset, group of assets, or index. Investor (1) Trade date – Initial Amount
Characters
 Linked to single stock or a portfolio of stock
 Leveraged note format Note Issuer
 Yield Enhancement and Market participate (5) Maturity date – Net P/L
 Not flexible for trading or rebalancing
Indicative Term Sheet
Equity (2) Trade date – Total Amount
Equity ABC.HK
Principle HKD 100M (4) Maturity date – P/L
Leverage HKD 100M
Scenario Analysis
Total HKD 200Ms
LTV 50% Equity Price at Market
Principle Interest P/L
Maturity value
Initial Price $10
Interest 10% p.a. $20 $100M $(10M) $400M $190M

Margin call level LTV≥65% $10 $100M $(10M) $200M $(10M)

Liquidation level LTV≥70%

 Bond Leveraged Note
Introduction Structure

The return on a structured note is linked to the performance of

an underlying asset, group of assets, or index.

Characters
 Linked to bond or preferred stocks
 Leveraged note format
 Yield Enhancement and Market participate
 Not flexible for trading or rebalancing
Indicative Term Sheet
Bond Corp ABC 3.2 03/26/2023
Notional Amount USD 30M
Clean/Dirty Price 105.00/110.00
Principle Amount USD 11M Scenario Analysis
Lending Amount USD 22M
Clean Price Dirty Price Capital Rate of
LTV 66% Coupon Interest P/L
at Maturity at Maturity G/L Return
Tenor 1 year
106 111 0.3M 1.8M 0.7M 1.4M 12.7%
Lending Interest 3.2%
Liquidation Level 85% of initial price 104 109 -0.3M 1.8M 0.7M 0.8M 7.3%
 Total Return Swap
Introduction Indicative Term Sheet
Principle HKD 200M
A total return swap is a swap agreement in which one party Notional Amount HKD 500M
makes payments based on a set rate, either fixed or variable, Tenor Flexible
while the other party makes payments based on the return of an
Interest rate 3%
underlying asset, which includes both the income it generates
The broker receive lending Amount
and any capital gains. Maturity
(300M) + Interest (9M)
The investor receive G/L – lending
Characters amount - interest
 Linked to single or a portfolio of equity, bond, fund, etc.
Margin call Level LTV = 72%
 ISDA agreement
 Yield Enhancement and Market participate (Cross-border) Liquidation level LTC = 80%
 Flexible for trading or rebalancing MTA (Minimum
HKD 200,000
Transfer Amount)

Scenario Analysis
Investor
Portfolio NAV Interest
P/L
+15% 0.7M 75M
-15% 0.7M -50M
 Cross-Border Total Return Swap

HK, US stocks, ETF, Bond, hedge, arbitrage, IPO A shares, Options, ETF, fund, futures, etc
• Introduction
C ONTENTS

• The Business
• The Course
• Chapter I: The Wealth Management Process
• Wealth Management Platform
• Topics on family office
• Chapter II: Fiduciary and Professional Standards
• Special topic: How to become a successful wealth manager?
 What is a family office?

 Families may create a family office to support their overall financial needs, after the sale of a family business
or another significant liquidity event. Every family office is as unique as the family it serves.

 Family offices can provide a wide range of services, including:

 Investment strategy and management

“The family office is a unique
 Tax planning family business that is created
to provide tailored wealth
 Estate planning
management solutions in an
 Charity planning integrated fashion while
promoting and preserving the
 Family education & multi-generational planning
identity and values of the
 Lifestyle management services family.”
 When does it make sense to create a family office?

 Managing family wealth successfully is a complicated undertaking, and starting a dedicated single family
office is one way to manage this complexity.

 Families who decide to start a family office typically have at least $100M in investable assets and want to:

 Maintain control of their assets and the decision-making process

 Preserve their privacy

 Benefit from collective buying power of the family’s combined assets

 Keep the family together

 Have a dedicated team devoted to providing key services and helping achieve long-term goals
 Single family office or a multi-family office?

 Single Family Office

 Wealth owners with investable assets that exceed $100 million may choose to start their own wealth management
business, known as a single family office, to oversee all aspects of their human and financial wealth.

 The sole purpose of this organization is to ensure that the goals and priorities of its owners are pursued in an
independent and conflict-free manner.

 For the purposes of this guide, the terms ‘family office’ and ‘single family office’ are used interchangeably.

 Multi-Family Office

 A multi-family office (MFO) is a wealth management firm that offers integrated, highly customized services to a limited
number of clients. Participating families have access to a wide array of integrated services.

 Individuals and families with assets greater than $20 million may be best served by a MFO. MFOs allow families to
access the benefits of a dedicated single family office without the overhead and responsibility of running a new business.
How much does a family office cost?
 Goals and complexity of the family office

 A common misconception is that asset size

is the most important factor in determining
wealth management needs. In reality, the
goals and circumstances of the family will
dictate the complexity of wealth
management needs.

 Factors to consider include the number of

family members or households, the nature
of the ownership and legal structures, the
types of investments, and the entities that
house them.
 Goals and complexity of the family office

 Being in the wealth management business

involves much more than hiring money
managers to invest the proceeds of the sale.

 Preserving wealth requires owners to think

of the wealth management process as a
shared family business.

“For 10 years I thought I was

in the investment management
business, but now I realize I’m
in the risk management
business.”
– CIO, U.S. Family Office
 Discussion

 Q1: We see rapid growth of family wealth with more family offices established around the
world, why do you think they need a family office?
 Discussion

 Q2: What are key elements to consider when setting up a family office to ensure a good
wealth transition?
 Discussion

 Q3: Although investment strategies and styles vary from family to family, we believe
preserving assets and growing assets is the main goal. What should family offices do to
achieve that?
Return

Risk Liquidity
 Discussion

 Q4: What makes Hong Kong attractive as a family office destination?

• Introduction
C ONTENTS

• The Business
• The Course
• Chapter I: The Wealth Management Process
• Wealth Management Platform
• Topics on family office
• Chapter II: Fiduciary and Professional Standards
• Special topic: How to become a successful wealth manager?
 Chapter2:
Fiduciary and Professional Standards

The most treasured asset in investment management is a steady hand at the tiller.
-Robert Arnott
 Code of Ethics and Professional Responsibility

 Client first: Place the client’s interests first.

 Integrity: Provide professional services with integrity
 Objectivity: Provide professional services objectively
 Fairness: Be fair and reasonable. Disclose and manage conflict of interest.
 Professionalism: Act in a manner that demonstrates exemplary professional conduct.
 Competence: Maintain the abilities, skills and knowledge necessary to provide professional
service competently.
 Confidentiality: Protect the confidentiality of all client information.
 Diligence: Provide professional services diligently
 Fiduciary Duty in Wealth Management

 Consider the uniqueness of the client

 Design the policy for total return
 Risk management rather than risk avoidance
 Beneficiaries can be disserved by undue conservatism as well as by excessive risk taking.
 Minimize diversifiable risk by diversification
 Determine the risk tolerance of the client
 Foreign investments
 ETFs and mutual funds
 Liquidate inappropriate investments
 Fiduciary Duty in Wealth Management

 Delegate where appropriate

 Passive and active managers
 Reasonable and adequate basis
 Best execution
 Practice management process
 Know your legal duties
• Introduction
C ONTENTS

• The Business
• The Course
• Chapter I: The Wealth Management Process
• Wealth Management Platform
• Topics on family office
• Chapter II: Fiduciary and Professional Standards
• Special topic: How to become a successful wealth manager?
 How to become a successful wealth manager?

Short-term clients look for gurus. Long-term clients want sages. There are no gurus.
- Harold Evensky
 Wealth Management Business
 What is Wealth Management business for a person?
 Françoise business
 Big base + Mega Move (Accumulate!): Will not start from zero every year.
 Less worry about Fintech/AI/Machine learning
 What is Wealth Management business for a firm?
 Distribution Power
 Balancing Revenue
 Cross Selling
 How to manage wealth management business?
 Complete free hands
 Flexible, cross asset, cross selling
 Flat organization, few layers, fast response and approval (push me!)
 Private Banking vs Private Wealth Management
Private Banking Private Wealth Management

Bank Commercial Bank Investment Bank

Private Bank
Structure Relationship Manager Relationship Manager
Investment Consultant Investment Advisor
Middle Office Middle Office

Advantage Balance Sheet Equity

Funding Cost Trading
Branding Investment banking

Client Facing Team (RM + IC) Individual (RM)

KPI AUM Revenue
 Characters of successful wealth manager

 Healthy, vigorous
 Skillful, diligent, knowledgeable
 Time management, discipline, compliance
 Emotional stability
 Looks rich vs looks humble
 Live a high life, golf, country club and Porsche
 At least you should know how the rich lives
 PWM in investment bank: be professional!
  PWM in investment bank: be professional!

 High IQ and EQ
 Comprehensive
 Equity research + Product Knowledge
 Business sense

Outstanding RM push the management

Outstanding financial institution push the regulator
 What kind of RM does the client like most?

 Professional but not …

 Shrewd: showing quick practical cleverness, looks too smart
 Defensive
 Threaten
 Reliable
 Patient
 Considerate
 Careful
 Proper client relationship

 Trust but not too close

 Friendly but not too casual and easy-going
 Client is not god. Be selective
 keep proper distance

Clients are clients,

they are dangerous animal!
 How to meet revenue target?

 Revenue = ROA * AUM

= ROA * [single client asset] * [number of client]
= ROA * [single client asset] * [number of client visits] * [conversion rate]

 Number of client visit: delegate, channel (foreign bank vs Chinese banks vs securities)
 Conversion Rate: practice make perfect, dry run
 Single client asset: “small client” or “big client with small money”?
 ROA: pricing model and skill; margin improvement plan
 How to accumulate AUM?

 AUM means your farmland.

 Self-pitched new money
 Capital gain of old money
 Referred easy money

Small clients are small clients

you always need new blood.
 You should know when to give up

 Give up cases, not your career

 Don’t waste your time in hopeless case
 Reasonable conversion rate: < 20%
 High coverage rate vs low conversion rate
 How to prepare a client meeting?

 Investigate clients’ background and demand

 Understand the advantage of your company
 Comprehensive and Focus
 Well prepared for client’s question and objection (how to prepare and practice?)
 Ask the question in client’s heart, and answer it!
 Those questions the client may feel awkward and embarrassed to ask
 If not, you won’t have the chance to answer.
 E.g. Insurance broker
 In bear market

 For old money

 Actively meet the clients (stay with the client in bear market)
 At least, always be reachable, listen to the client’s compliant
 Explain the bad calls
 Comfort and accompany
 For new money
 Accumulate AUM
 Find new potential client and business opportunities
 In bull market

 When you are on the top, make the most of it!

 Sit in the floor rather than busines trip
 Remember: bull market is short.
 Dos

 Involve your boss in big deal

 Make business plan with your manager
 Ask for help
 Talk something the client don’t know
 Networking
 Client referral
 Keep confidential (I’m swiss bank)
 Don’ts

 Argue, criticize and laugh at the clients (make the client feel like a fool)
 No response to client’s complaint and requirement – it will get worse
 Long time no see
 Wind Bag (Talk excitedly and boastfully) – Listen to your clients
 Criticize your competitors
 Beg for money or business
 How to deal with compliance issues?
Tell your manager as soon as possible. No fluke mind!
Thank You