Finance professionals in Hong Kong are generating approximately HK$35.8 billion (US$4.66 billion) in investible income annually but face significant hurdles when trying to invest that money. According to a report compiled by the digital wealth management platform Endowus and strategy consulting firm Quinlan & Associates, these difficulties stem from personal account dealing (PAD) restrictions.
These regulations, which apply to various roles including bank employees, brokers, and asset managers, are designed to prevent insider trading, manage conflicts of interest, and ensure client interests take precedence over those of employees. The report estimates that nearly 237,000 finance professionals in Hong Kong are currently limited by these PAD restrictions.
The report compiled by Endowus and Quinlan & Associates noted that the average income in Hong Kong’s strictly regulated financial services industry stood at HK$66,245 per month last year, roughly three times the median income of the employed population. However, despite these high earnings, professionals reported feeling burdened by restrictions throughout the investment process, specifically citing a lack of access to wealth advice and heavy disclosure requirements.
Benjamin Quinlan, CEO of Quinlan & Associates, stated that finance professionals face “three key pain points” in their personal investment plans due to PAD restrictions: limited investment choices, heightened risk, and an inferior investing experience in their end-to-end investment journey.
Samuel Rhee, chairman and group chief investment officer of Endowus, noted that some professionals are “simply giving up” on investing. He warned that “keeping your savings sitting in cash is the costliest mistake because time in the market is an investor’s most valuable asset.”
The data shows that only 30 per cent of finance professionals in Hong Kong feel secure about their retirement planning, while 33 per cent believe their employers should do more to support their long-term planning. To address this, the report identified employee investment programmes—where employers partner with a regulated funds platform to offer a pre-approved list of funds—as a “novel solution” to unlock the HK$35.8 billion in investible income.
The finance sector is the largest contributor to the city's economy, accounting for about 26 per cent of the city's gross domestic product. Hong Kong regulators have continued to stress the importance of unlocking untapped liquidity within the city’s capital markets, as seen at last month’s Asia-Pacific Financial Forum.
