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Following is a speech by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, at the Financial Planner Awards 2006 today (October 4):
Tony (Mak), Mark (Clifford), distinguished guests, ladies and gentlemen,
It gives me great pleasure to participate in the Financial Planner Awards 2006, jointly organised by the South China Morning Post and the Institute of Financial Planners of Hong Kong. This event does not only provide us an opportunity to extend our congratulations to those financial planners who did an excellent job in their profession in the past year, but also showcases the rich pool of financial professionals that Hong Kong possesses.
Importance of Human Resources to Hong Kong as an IFC
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When we talk about the success story of Hong Kong as a major international financial centre, we would think of the many strengths our city has. To name a few, these include the rule of law, a robust and effective regulatory regime, being the world's freest economy, free flow of information, and a good tax regime. Underpinning all these attributes is our valuable talents who have contributed to the development of Hong Kong's financial services over the years.
Indeed, human resources is one of the most critical and crucial factors for the sustained development of an economy. In the financial services sector, the need for an adequate supply of high calibre financial professionals cannot be emphasised more. The Government attaches great importance to expanding and upgrading our human resources in the financial services sector. To this end, we set up in 2000 the Advisory Committee on Human Resources Development for the Financial Services, drawing together the Government, industry, and the academics on financial services and manpower development to coordinate efforts to train up professionals.
I am glad that the Government's efforts are complemented by a number of professional bodies, including notably the Institute of Financial Planners of Hong Kong. I understand that the number of Certified Financial Planners in Hong Kong has already exceeded 2 000 this year, doubling that in 2003. This has also made Hong Kong "No. 1" in Asia in terms of the ratio of Certified Financial Planners to the population.
Financial Planning Profession
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Financial planning is a multi-disciplinary profession which encompasses talents in major financial services sectors in Hong Kong, including banking, insurance and independent financial advisory services. The increase in number of financial planners matches with the further development of Hong Kong as a financial services hub and an asset management centre.
Hong Kong as an Asset Management Centre
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Hong Kong is a major asset management centre. Our fund management industry has recorded a sizable growth in recent years. According to the annual fund management activities survey conducted by the Securities and Futures Commission, our combined fund management business, comprising asset management, advisory business, private banking business and real estate investment trust business amounted to HK$4,526 billion in 2005, representing an increase of 25% over 2004 and an accumulated 53% growth over 2003.
The high domestic savings and increase in personal wealth in Asia, positive regional economic outlook, together with increasing public awareness of the importance of early retirement planning, have presented immense opportunities for the development of Hong Kong as one of the world's leading asset management centres. According to the statistics compiled by the World Bank, the asset under management for nine East Asian economies, which include the Mainland, Hong Kong, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore and Thailand, amounted to some US$1,649 billion up to end-2004.
In addition, the rapid economic development and the financial reforms underway in the Mainland are generating further business opportunities for our asset management industry. At a forum in Hong Kong last week, the Chairman of the China Banking Regulatory Commission, Mr Liu Mingkang mentioned that the number of high-net-worth individuals in the Mainland had been increasing over the past few years. The number of Mainland residents with current assets of over US$1 million grew by about 7% last year to 320,000 people. This demonstrates the tremendous development potential of the Mainland's investment market and the strong demand for investment products.
Government Initiatives
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To strengthen Hong Kong's position as a major asset management centre, the Government has spared no efforts in promoting our asset management business. With the abolition of estate duty with retrospective effect from July 15, 2005, more local and overseas investors are attracted to hold assets in Hong Kong and use our financial services. This creates a win-win situation for Hong Kong's asset management business as well as for foreign investors who look for effective investment means and professional financial intermediation services such as tax and estate planning. Another measure is the exemption of offshore funds from profits tax. These measures help enhance Hong Kong's competitiveness as compared to other international financial centres, including the US, the UK, and other financial centres in the region.
Our measures to develop Hong Kong's asset management industry do not stop here. At the Economic Summit on "China's 11th 5-year Plan and the Development of Hong Kong" held last month, the Focus Group on Financial Services convened by Dr the Honourable David Li has discussed, among other things, how to attract more pension funds, university endowment and private foundation funds to be set up and invest locally, with a view to further strengthening and developing Hong Kong as an international asset management centre. A working group headed by Dr Edmund Tse has been formed to study this in the coming months.
We have also been partnering with the financial services industry in promoting HK as an international financial centre and asset management centre. A few weeks ago, I led a delegation comprising over 100 prominent leaders from the financial services industry to Hunan. The visit has enhanced mutual understanding between Hunan and Hong Kong and promoted economic cooperation between the two places. Early this year, I took part in an Investor Conference in Kuala Lumpur to brief the Malaysian investment community on Hong Kong's latest developments and investment opportunities. I also visited the Middle East, together with a delegation of the Hong Kong Trade Development Council to promote Hong Kong's financial services. As many of you would agree, some countries in the Middle East have experienced significant economic growth in recent years due to the booming oil industry and their strategic policies to diversify their economies. Those Middle East countries have great investment opportunities and financial services cooperation potentials, and I intend to visit there again early next year to further promote Hong Kong's financial services and asset management business.
I have full confidence in our financial services industry, and I believe our financial planning profession will continue to flourish with the huge development potentials of our asset management business.
I would like to take this opportunity to express my gratitude to the Institute of Financial Planners of Hong Kong for its valuable contribution in promoting excellence in the financial planning profession. Investors are now much better informed, thanks to various sources of investment information made available by the media, including the co-organiser of today's event, South China Morning Post, which has been around for over 100 years. Two weeks ago, the Securities and Futures Commission released results of a survey on the engagement of investment advisors, conducted by the Centre for Corporate Governance and Financial Policy of the Hong Kong Baptist University. The survey found that when choosing an investment advisor, 74% of investors emphasised on the investment advisor's market knowledge. It is important that financial planners are well equipped to meet the growing demand of investors for qualified and competent financial planning advice.
Concluding Remarks
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Ladies and gentlemen, financial services industry is a major pillar of our economy. The Government is determined to uphold Hong Kong's position as an international financial centre and to further develop our asset management business. We count on your continued support in the grooming of financial planners for the industry.
In closing, I would like to thank the South China Morning Post and the Institute of Financial Planners of Hong Kong for successfully organising this event, and congratulate all the Financial Planners 2006 Award winners for their outstanding achievements. Thank you.
Ends/Wednesday, October 4, 2006
Issued at HKT 20:13
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