A split decision for the Bank of China
Marks are lost on advice relating to insurance but recommendations on investment get the thumbs-up
As part of a series to test the quality of the financial advice being given by Hong Kong's banks, the carried out a mystery shopping exercise at eight institutions. This week our reporter, who poses as a 37-year-old expat mother of two who wants to invest HK$10,000 a month into a pension, visits Bank of China.
Staff did no financial needs analysis or risk assessment. In fairness to Bank of China, the mystery shopper did not have an account with Bank of China, and the bank said it would only sell insurance and investments to those who did.
The adviser said he was happy to talk about the bank's offerings, but that the shopper would have to open an account before she could sign up to any plan.
The adviser then gave the shopper a copy of a questionnaire designed to test a client's risk appetite. It consisted of 10 questions, covering education level, previous investment experience, attitude to volatility, current investment holdings and level of disposable income for investing.
The adviser first presented the so-called Glorious Life Saving Insurance Plan. This plan involved a payment of just over HK$10,000 a month for 10 years. He said that, after 20 years, it would have a cash value of HK$2.2 million. If the shopper left the money in the plan until she was 60, it would be worth HK$2.5 million, of which HK$1.73 million would be guaranteed. The policy included life insurance.
The shopper responded that she was looking for an investment - that is, for something that did not involve insurance. The adviser said he could not discuss investments and left to find a second adviser, who suggested Bank of China's Monthly Stocks Savings Plan. Here, the shopper would have to invest at least HK$1,000 a month. But the plan was flexible: she could invest in 20 to 30 blue-chip stocks.
