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Surveying changing customer needs key to rebuilding reputation for the wealth management industry

With all wealth management banks painted with the same brush after some mis-sold Lehman Brothers mini-bonds, HSBC has developed a “Fund Radar” to keep its pulse on client needs.

April 22, 2011 | Research

Even if HSBC Hong Kong, played an active role to restore confidence and trust among customers in the retail financial services industry, it was hit by an unprecedented public outcry of mis-selling incidences. Though HSBC did not sell structured Lehman mini bonds, it had to re-establish investor trust by changing its concept of the customer. It now has greater execution efficiency, investor protection and education, and provides customer care with a service pledge that promotes a core investment concept and fosters change in investment behaviour. 

Traditionally, Hong Kong investors tend to have a very short term investment horizon, mainly focusing on equity investments; they are less receptive to fixed income investments except for simple savings/time deposits. Based on its substantial research following the Lehman disaster, HSBC, which was not affected by the mis-selling incidents, realised that fixed income investments are more suitable products to safeguard assets under management through tough times while meeting customers’ long term investment goals. HSBC rebuilt trust by educating customers about diversification, and offering core investments with diversified exposures and stable risk-adjusted returns as well as products suitable for different market cycles. 

It leveraged on its global research capabilities and established an in-house “Fund Radar”, which is aninnovative quantitative fund selection model that evaluates funds based on relative performance, stability of performance, frequency of outperformance and average underperformance. HSBC launched the exclusive ‘World Selection’ as a core investment for investors with different asset allocation needs. The unique and innovative proposition offered a series of five investment portfolios providing highly diversified global exposure to a mix of asset classes and managers. ‘World Selection’ proposition was well received by customers and immediately become one of the most popular...

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