HKIFA released the second part of survey findings, polling 950 fund investors, of which 760 were from Hong Kong.
Wealth management model preference
|
|
Hong Kong investors |
Mainland investors |
|
Charging annual fee |
29% |
39% |
|
Charging fees/commission based on each transaction |
57% |
36% |
|
Neither |
14% |
25% |
Source: HKIFA
As seen from the above chart, Hong Kong investors prefer a commission-based model, while mainland investors prefer an annual fee.
“Those who prefer a commission-based model opine that it is fairer and easier to understand. They also think that a fee-based model is not optimal as they don’t make fund transactions frequently,” HKIFA said in a statement.
“Respondents who make frequent transactions prefer the annual fee model. Supporters also expect a wider choice of products will be made available under this model and there would be less conflicts of interest.”
Differences among investors in the two territories are also seen in terms of their pick on the type of advice they want.
Type of advice
|
|
Hong Kong investors |
Mainland investors |
|
By product |
28% |
19% |
|
By portfolio |
25% |
34% |
|
Both are good |
39% |
41% |
|
Neither |
8% |
6% |
Source: HKIFA
More mainland investors perfer portfolio-based approach than Hong Kongers, although the majority of both groups said a combination of the two approaches also work.
Out of those who prefer the portfolio approach and those who think both are good, 42% are willing to disclose their total asset figure to their advisors.
Risk assessment bother
Commenting on the fund purchase process in the SAR, roughly 55% of buyers from Hong Kong and the mainland viewed some steps as unnecessary, particularly the audio recording of the risk assessment process.
HKIFA noted that a bank does not have to conduct a risk profile assessment of each investor for each fund purchase.
“If the customer has already completed an assessment before and the results are still valid (validity usually lasts for one or two years depending on different banks’ policies), the bank can proceed on recommending suitable investment funds to the customer without carrying out a risk profile assessment again,” it said.
Also, “audio-recording is an important investor protection measure,” it added. “Audio-recording the risk profile assessment and the selling process can help ensure such processes are properly conducted (e.g. to guard against misrepresentation or omission in the profiling and risk disclosure processes).”
Still, according to the survey findings, the majority of respondents – 56% of Hong Kong investors and 82% of the mainland peers – said they should be able to invest in products that do not match their risk profile.
Earlier, the organisation released the first part of the survey, which asked investors about robo-advisors and digital distribution channels.
