RSA Conference Exhibitor List 2024 - Exhibitors Data
The Future of Financial Advisors – Dr. Sidney Sze
1. The Future of Financial Advisors:
R.F.P. in action
September 14, 2012
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2. Dr. Sidney Sze
CFP,FHKRFP,CLU,CFE,CMA,CPA,ACMA,MSCPA,
ACS,ACIS,ACIS,MMS,PhD,Certified NLP Trainer
• Founder President of
Society of Registered Financial Planners (HKRFP)
• Chairman of CAGI Think Tank
• Founding Chairman of Independent Financial Advisors
Association
• The Founder CEO of Midland Financial Group.
• President of the Society of Management Accountants of
Canada – Hong Kong Branch 2000/2002
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4. How Cost Reduction Affect Net Profit
20% cost Equivalent
Current
reduction in Sales
Revenue $100 $100 $140
Direct operating cost $35 $35 $49
Labor costs $35 $35 $49
Non-core indirect $20 $16 $28
costs
Net Profit $10 $14 $14
20% cost reduction = 40% increase in Net Profit
$4m in expense savings = $40m revenue increase
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5. Pricewaterhousecoopers Statistics from 590
businesses in Europe, Americas, Africa & Australia
– Why the chances are missed ?
• Only less than half (48%) of all firms have a
cost cutting strategy in place
• 74% of companies often get their cost cutting
priority wrong by cutting what is easy to
measure rather than what is most needed
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6. Cost management challenges
• Multiple suppliers and multiple order points
• No internal benchmark data on purchases
• Staff and management have limited time and
resources to address non-strategic costs
• Employees with limited purchasing
experience are making buying decisions
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7. Insurance
• Don’t over buy
• Choose policies better suit the appetite of local
insurance companies
• Lock in when price is low
• Seek group plan
• Challenge brokers
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9. Family Office
A family office is a private company that
manages investments and trusts for a single
wealthy family.
The company's financial capital is the family's
own wealth, often accumulated over many
family generations.
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10. Traditional & Modern Usage
A traditional family office is a business run by
and for a single family.
Its sole function is to centralize the
management of a significant family fortune.
Typically, these organizations employ staff to
manage investments, taxes, philanthropic
giving, trusts, and legal matters.
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11. Traditional & Modern Usage
The purpose of the family office is to effectively
transfer established wealth across generations.
The family office invests the family's money,
manages all of the family's assets, and disburses
payments to family members as required.
The office itself either is, or operates just like, a
private company, with a COO, CFO, CIO, etc. and a
support staff reporting to you the CEO.
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13. Possessing enough knowledge
Some people might think it is a good idea
to keep their will in their safe deposit box
in the bank since this should be one of the
safest places to keep it.
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14. Will in safe deposit box?
In the event of death, all assets will be frozen
pending the grant of probate including safe
deposit box in the bank.
The result: heirs are trapped in a catch-22
situation.
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15. True Experience ?
An investment company set up an off-shore
trust by appointing the client as the trustee.
In the absence of the client, there will be no
trustee to oversee the trust for the benefit of
his grand children’s education.
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16. Wealth Creators
Most great wealth creators are so used to
taking risks that they become “blind” to the
risks that threaten their created wealth.
As a result, they continue to spend most if not
all of their time taking more risks to create
more wealth.
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17. Casual time means no time
You can “buy time” from the professionals who
sell their time to assist you in wealth
maximization.
You can “buy time” from a Family Office to
help you to manage non-critical activities while
you focus on critical decision making.
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18. CEO
Your client is successful in his business not
because he possesses all the essential
elements to manage the business.
He is successful in business because he has a
business office to provide him with all the
essential elements.
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19. Multi Family Office
Private company multi-family offices are now
opening to provide the same menu of personal
services that a single wealthy family obtains from
its own family office.
Some of these multi-family office are housed in
law firms and public accounting firms. Others are
either stand-alone or are outgrowths of a single
family's office.
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20. Family Office Exchange (FOX)
FOX, a family office specialist company in
Chicago, estimates that there are around 3,000
family offices in the US.
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21. The Financial Enterprise Has All the Complexities
of a Family Business
Family
Enterprise
Business Other
Assets Family Assets
Ownership Wealth Ownership Family
Capitalization Shareholder
Control & Requirements
Preservation & Structure & Philanthropic
Liquidity Enhancement Tax Planning Goals
Succession
Wealth Creation Wealth Enhancement
(Wealth Maximization)
Source: The Family Office Exchange
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22. Wealth Management
With a business office to help you in wealth
creation and a Family Office to help you in
wealth maximization, your wealth
management will be complete.
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23. Clients’ Big Problems
Industry motivated by greed
Firms putting their own interests ahead of investors
Industry’s reluctance to punish wrongdoers
Lack of internal controls to prevent wrongful actions
Insider trading
Insufficient disclosure of risks to investors
Accounting churning
Insufficient disclosure of fees to investors
Transaction fees/commissions too high
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24. Private Banking vs. Family Office Model
Characteristic Private Banking Family Office
Wealth Management Product-oriented Product Neutral
Methodology
Investments are managed in
Investment-management
the context of the family
focused
“balance sheet”
Advice centered on “in-house” Advice reflects a full view of
portfolio only client’s assets
Little or no coordination / Coordinates / collaborates
collaboration with third-party with all providers to develop
providers an integrated wealth strategy
Service oriented toward Service focuses on the mid-tier
individual mid-tier millionaires millionaire family “entity”
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Source: Cap Gemini/Merrill Lynch World Wealth Report 2005
25. Private Banking vs. Family Office Model
Characteristic Private Banking Family Office
Process & Pricing Transaction-based pricing now Historically Asset Under
moving towards Assets Under Management-based pricing
Management or “by service” fee
menu
Ad-hoc investment process; Investment process is often
reacts to market conditions documented and
standardized, according to
agreed-upon investment
policy
Portfolio reviews based on Portfolio reviews are regularly
standard templates scheduled and customized,
according to client’s needs
and preferences
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Source: Cap Gemini/Merrill Lynch World Wealth Report 2005
28. Find the Man in the Coffee Beans
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29. Value areas in our lives
Career
Spirituality Family
Health & Relationships
Fitness
Personal
Growth &
Development
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30. The Information Filters
We exist in our external environment and
select information through our senses of
sight, hearing, smell, taste and touch.
Our senses or our receivers are bombarded
by over two million pieces of information at
any second.
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31. The Information Filters
In order to make sense of what’s going on
around us, we have to decide which pieces
of information we are going to pay attention
to.
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38. Children’s Grades
The questions posed to parents was: “Your
child shows you the following grades: English
– A; Social Studies – A; Biology – C; Algebra –
F. Which grade deserves the most attention
from you?”
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39. The vast majority of parents in every countries
focused on the F.
COUNTRY Focused on A’s Focused on F’s
U.K. 22% 52%
Japan 18 43
China 8 56
France 7 87
U.S. 7 77
Canada 6 83
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40. The Magic Ratio
John Gottman’s pioneering research on
marriages suggests there is a “magic ratio” of 5
to 1 – in terms of our balance of positive to
negative interactions.
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