FINANCIAL AND WEALTH MANAGEMENT FOR LONGEVITY

Professor KC Chan and Dr. Christopher Goh

Introduction

Financial and Wealth Management is the final installment of the 5 Building Blocks for Success (5BBS). It is the roof of the House for 5BBS.

The foundation is Results- Driven and Crisis Turnaround Leadership. Leadership is the process of influencing an organiz ed group towards accomplishing its goals. Hence, leadership becomes everyone’s business to prevent crisis from happening and when crisis does happen, to turn crisis into opportunity.

The three columns of the 5BBS are held up by Execution Capability and Process Management to enable strategy to be translated into projects for successful execution to be faster, cheaper and better than the competition. Brand Leadership and Customer Experience Management take advantage of the five Senses of Marketing, i.e. Sight, Sound, Smell, Taste, Touch, to create a unique holistic customer experience. Brand Leadership and Customer Experience Management needs the right Human Capital and Talent Management for consistency in service quality which results in customer delight. Talent Management is about putting the right people in the right place, and keeping them over the long haul. There is a need to identify the key players who have critical relationships with customers and suppliers, and then    to nurture and keep those players. Part of this critical capability is the awareness of keeping only the best performers, getting rid of the bottom 10 percent of people who are not performing up to standard, and going through this weeding-out process on a regular basis (yearly) and by doing so, upgrade the talent and performance pool.

Evolution In Financial and Wealth Management

            Prior to 1980s, wealth management was cash deposit, either from surplus of profits or inheritance and/ or income,  into a bank offering the highest interest rate.

            In the 1980s, wealth management was about acquiring financial products such as life insurance or mortgage insurance where it could be purchased on a “needs basis”, often initiated by the end-user or investor. There was hardly any professional advice from anyone.

            In the 1990s, wealth management evolved into financial management where proper financial advisory was rendered, usually by a Financial Advisor/ Planner, to an individual and/ or to their family,   with formulation of financial plan, including the purchase of desired financial products/services.

            In 2000s, wealth management is about proper segmentation of clients with differentiated products/services catering to their specific needs, offering wider range of financial products such as hedge funds, private equity and structured products, and providing financial advisory, resulting in formulating financial plan for the individual, his family as a whole, and the company as well.

            In 2010s and beyond, professional family wealth management and their longevity is the focus. Hence the establishment of Family Enterprise Office, with proper segregation of family governance  and business management, the setting up of Charitable Trusts for the purpose of creating philanthropic activities, and/ or investing into socially responsible investments such as green project through the formation of Non-Government Organizations (NGOs) to promote social entrepreneurship.

            On hindsight, wealth management works. But, it does require  a paradigm shift to professional wealth management as a Strategy to attain Longevity by addressing the People issue through Human Capital and Talent Management for Achievable Success; Process issue through Execution Capability and Process Management for Sustainable Success; Tools issue through Brand Leadership and Customer Experience Management for Scalable Success. 

            Achievable Success, Sustainable Success, and Scalable Success are only doable if every management staff has inculcated Results-Driven and Crisis Turnaround Leadership, striving towards a culture of performance.

            To be sure, the 5 Building Blocks of Success is developed based on the analogy of constructing a house. Every component is essential and vital to weather the storms and tsunamis in the business lifecycle.