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All About Getting A headstart (in Financial Planning)
Our Managing Director Mr Ken Lo talks about Financial Planning Practices.
(Article featured
in 4E Journal, Vol.5, No.2, July 2005)


If you have just been licensed by the Securities Commission to practise financial planning and are currently at the crossroads as to what to do next in terms of starting a practice, you might just want to Give Ken Lo, the chief executive officer of Money Concepts Malaysia Sdn. Bhd. a call.

The reason: he has a tried and tested business model that may interest you.

Malaysian financial planning practitioners have been debating and experimenting with different business models since financial planning came to our shores. But to date, they have yet to find a model that truly works. The perennial argument of commission-only, fee-only or a combination of commission and fee models has created only one thing so far - confusion ill the marketplace - both to the practitioners as well as potential clients. There is a general feeling in the industry that water (in this case, the compensation of financial planning practitioners) w ill find its own le el. The question here is: when?

But while waiting for that to happen and for the industry to further mature, you can still do something. You can most certainly explore your options. A good place to start would be to talk with someone who has done his homework. Someone who knows what he's talking about. Someone who has a proven model.

"You can indeed be owner of your own practice by establishing a Money Concepts financial planning outfit in your town or community," Lo tells the 4E Journal.

"That's not all. The franchise comes with all the prestige, identity and image that would do Your practice a lot of good. Through Money Concepts, you own and run Your own company. In every sense of the word, you're independent, but we will help, support and guide YOU as you go along. You will be in business for yourself, but not by yourself That's the best part. So it won't be that scary after all."

According to Lo, Money Concepts was established in the U.S. in 1979 with the recognition that in the current financial services environment, an independent practitioner can best serve his clients as an independent advisor with the support of a larger network providing a full range of services and systems - lightening the load of the complexity of doing business.

Money Concepts, Lo added, was created to help the client-oriented independent financial planner succeed with turnkey business systems and solutions. 'We are a worldwide network of financial planning centres focused on individual, family and business financial planning," he pointed out. "The acceptance of Money Concept ideas is such that we now have over 650 financial planning centres throughout North America, Europe and the Pacific Rim (in the U.S., Canada, Hong Kong, New Zealand, Ireland and Malaysia), and I believe it's currently the biggest financial planning outfit in the world. It's endorsed by two banking groups in the U.S. - American Community Bankers Association and the Farm Credits Association. Members of these two banking groups partner with Money Concepts International in advising their clients at their respective bank premises. It is also associated with Money Concepts Capital Corporation and is a broker dealer and member of the National Association of Securities Dealers (NASD) and Securities Investor Protection Corporation (SIPC)."

"I knew about Money Concepts seven or eight years ago," Lo said. "Canada currently has the most successful operation outside the U.S. So, I went to Toronto not too long ago to see and understand the operations and franchise, and thought it would make the perfect fit in Malaysia. We have an emerging industry, which has yet to settle on an

equitable business model. I believe Money Concepts is a good Solution to this problem."

Lo bought, the Money Concepts franchise fro m Hong Kong-based Money Concepts Asia, which owned the Asia Pacific license. "The next wave of wealth management is in Asia. Asia is huge, ... virtually untapped," he said enthusiastically. In Malaysia, Money Concepts will cater to high net worth clients in the beginning. "We currently don't have the resources to serve everyone," Lo pointed Out. "Money Concepts already has the system. So duplication is no issue. The key to Succeed is very simple for us - get the right people on board. We already have the system and the experience."

In terms of growth, Lo is looking to set up two Money Concepts centres in the first year of operation. He is optimistic for 10 centres in three years and is hoping for 20 centres throughout Malaysia in five years.

"In today's highly competitive and increasing complex market environment where people are generally more well-educated and better informed, the real competitive advantage is the relationship you build with your customer.”

Money Concepts believes in the mentorship method. "It's a channel of distribution where budding financial planners go to be mentored (to learn and to practice). We already have the financial planning software, the business, marketing and management systems and we are very client focus when it comes to customer service. There's already a business approach. In short, everything's in place. We don't need to re-invent the wheel because it's costly, for one and very time consuming. As a young industry, financial planning in Malaysia should concentrate on more critical issues like customer relationship and ethics," Lo said.

"Financial planning is not _just about taking the client's information, churning out a plan and charging him a fee. Anybody can do that," Lo added. "It's about advisory work - helping the client to Understand himself, what lie wants to achieve financially, professionally and personally, and then designing the plan and recommending the right products to help him achieve his objectives

"The financial planner's objective should not be about selling products. His job is to Understand the client's needs, where he is now and where he wants to go These two steps need a lot of education and understanding. The danger is always giving the clients the wrong products. Your clients don't need a speedboat to climb Mount Kinabalu. YOU Must always have the client's interest at heart," said Lo, who halls from the land beneath the wind - Sabah.

"'In today's highly competitive and increasing complex market environment where people are generally more well educated and better Informed, the real competitive advantage is the relationship you build with Your customer," said Lo who was trained as a building and structural engineer at the University of Liverpool. "You can no longer be satisfied with a transaction-based approach. The marketplace has changed quite a bit. People are no longer attracted to _'List buying products. They are more concerned about relationships.

"Today, people of all income levels are finding Out that they need professional financial guidance. Whether that's a result of them being more aware of the need to plan or simply getting caught up with a market trend is moot. The real matter at hand is the demand for the service. So the first question to ask if you want to become a financial planner in Malaysia currently is: who do you want to serve - the high-income group, the middle-income group or the low-income group? Different mindsets will have different approaches and requirements. For a start, financial planners should be specialised in a niche. If you're focused on a niche market, you'll end up a winner much easier.

"Once that is decided, you would need to figure out where your allegiance is," Lo said. "If you are an insurance agent OF a unit trust agent, You Would have to decide whether you still want to be tied or not when you are practising financial planning. This is important because Money Concepts does not allow its practitioners to be tied - in my opinion, one step further into compliance - in order to be truly objective in your recommendations.

"When that's done, you're in business - you're licensed to practice, have a business plan, Understand Your target market (niche) and have a business model, whether it's commission-only, fee-only, a combination of fee plus commission or Money Concepts." Sure sounds like Lo knows what he's talking about.

He does.

The man's not new in the financial planning business. He has been involved in peddling financial products and many aspects of the financial planning process prior to bringing Money Concepts to Malaysian shores. That was after lie decided to leave his family business of' construction and property development. -1 didn't enjoy being a contractor," Lo said matter-of- "Besides there were some family issues. Rather than being embroiled in the issues, I decided to be involved in something else. I had three choices -banking, insurance or investment services. I decided on insurance and started Prudential's business In East Malaysia in 1983. 1 was with Prudential until the year 2000."

In addition to insurance, Lo has also dabbled in will writing, estate planning and business succession planning/inheritance planning. He is also of the founding members of Rockwills Corporation Sdn Bhd a lecturer and a syllabus (financial planning) developer.

But that's another story.

For more detail on Money Concepts Malaysia services, please visit www.moneyconcepts.com.my

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