Hong Kong’s Private Wealth Management Association (PWMA) has launched an Enhanced Competency Framework (ECF) for private wealth management practitioners in a move to encourage the development of the private wealth management industry and which is expected to help grow the structured products market.

The framework was developed by the Hong Kong Monetary Authority (HKMA) and co-drafted by a panel of representatives from the PWMA, the Hong Kong Institute of Bankers, Hong Kong Securities and Investment Institute and Treasury Markets Association with the aim of enhancing the level of industry core competence and ongoing professional development of its practitioners.

Although the framework was not specifically aimed at the structured product market it has been welcomed by market players as it will positively encourage the development of the private wealth management industry as a whole, where structured products have become an integral part for asset allocation.

“Besides the existing regulations in place governing the sale of structured products, the ECF as a voluntary programme will equip practitioners with a strong emphasis on work ethics and compliance,” a PWMA spokesperson told SRP.

Professional qualification
The PWMA will manage the ECF, including accreditation and exemptions, while practitioners will be required to go through formal exams and acquire a Certified Private Wealth Professional (CPWP) professional qualification.

The CPWP programme is divided into two modules: one including technical, industry and product knowledge which involves not only Hong Kong but also mainland financial products; while the other relates to ethics and compliance. The registration will start in October, and the first range of CPWP certified practitioners will be expected to graduate in the first quarter of next year.

“The framework is a potentially far-reaching initiative in that it will enable Hong Kong to build a brand that encompasses competency and integrity for our private wealth management practitioners,” said Kathryn Shih, chairman of the executive committee of the PWMA and chief executive of UBS Wealth Management.

“I am confident that the introduction of the ECF will consolidate Hong Kong's status as a regional wealth management centre,” added Lok Yim, vice-chairman of the executive committee of the PWMA and head of wealth management of North Asia at Deutsche Asset & Wealth Management (DeAWM)

Switzerland also has a similar plan for its private wealth management industry, whereas the framework in Hong Kong so far is non-statutory. The HKMA is urging private banks to consider using the ECF as benchmark when recruiting or deploying staff for private wealth management services.

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