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Treat Customers Fairly: HKMA issues new ‘Dear CEO letter’ to Private Wealth Management Firms

  • Hong Kong
  • Other


The HKMA issued a circular today announcing that a “Treat Customers Fairly Charter for Private Wealth Management Industry” has been developed with the Private Wealth Management Association.

The Charter contains 5 high-level principles which are modelled on the TCF Charter for retail banks previously announced by the HKMA on 28 October 2013. The 5 principles are:

  1. Products and client services should be designed to meet the needs of customers. PWM institutions should assess the financial capabilities and needs of customers before offering them products or services. The provision of advice or selling of financial products should take into account the interest of the customers, having regard to their profiles and the complexity of the financial products or client services in question.
  2. PWM institutions should set out and explain clearly the key features, risks and terms of the products, including any fees, commissions or charges applicable to customers. Appropriate information should be provided to the customers before, during and after the point of sale.
  3. All marketing materials and information designed for customers should be accurate and understandable. Misleading representations or marketing practices should be avoided.
  4. Customers should be provided with reasonable channels to submit claims, make complaints, seek redress, and PWM institutions should not impose unreasonable barriers on customers to switch to other PWM institutions.
  5. Recognizing that consumers also have their responsibilities, PWM institutions should join force with government, regulatory bodies and other stakeholders in financial education to promote financial literacy.

Although these principles do not form part of the existing law and regulation, they may be subject to HKMA’s review in its oversight and supervision. The HKMA expressly states in the circular that they expect authorized institutions which operate as private banks or with dedicated private banking units to follow the principles, and senior management and board of directors are expected to ensure their institutions and relevant staff abide by the principles.

To provide further guidance, the HKMA also provides examples of measures for implementing each of the principles in the circular. A link the full circular can be found here.