Introduction

From the end of Second World War to 1980s, people could inevitably make money by investing in property and shares, without needing much advice outside their own knowledge and prudence. However, today, with the dynamics of financial systems and their inter-relationship around the world changing dramatically, markets around the world have become interdependent and more volatile. Take the investment market for instance: fund managers, who once gave a capital guarantee, have now shifted the risk to investors by making their investments market-linked.

The need to protect assets and income has grown as people continue to enjoy economic affluence. More people are investing their assets and future income efficiently so that their economic security can be guaranteed, not only during the time they work but also after retirement. Rich individuals also want to plan ahead before their death so as to accumulate wealth for the benefit of their younger generation. Furthermore, the gradual increase in the old aged population, coupled with a longer life expectancy, indicates the growing importance of well-planned retirement and estate planning.

Traditionally, people would go to their accountant, lawyer, stockbroker, insurance agent or banker for advice but these disciplines are trained in only a portion of their needs. Thus, the profession of financial planning where financial planners #are able to provide multiple key services such as insurance, investment, retirement, tax and estate planning, emerged in the financial services industry. This profession is relatively new in Asia unlike the United States of America where some financial professionals have already started to claim themselves as financial planners, as early as, the late 1960s.

The Asian Financial crisis of 1997-1998, changing consumer needs, deregulation, technology and globalization can all be highlighted as key drivers of change in the Asian region and responsible for promoting change in the financial services landscape. The crisis of had a huge impact on many Asian economies.

In the insurance sector, many companies suffered financially as a result of fall in asset value and high customer guarantees set in place before the crisis. As a result, an urgent need to restructure the local financial sector has become evident.

In an effort to improve the quality of financial services, governments are now promoting new regulations, aimed at increasing the level of professionalism of insurance agents and deregulation, which blurs the traditional boundaries between banking, insurance and fund management.

Consumer�s attitude towards financial services and providers are also changing. The Asian consumer is becoming more knowledgeable about finance and has increasingly more complex financial needs. The consumer is also more conscious of the need for financial advice and investment diversification.

In addition, financial services become increasingly important to Asian consumers as the individual assumes greater responsibility for funding their own retirement. The family safety net, which in the past has cared for the older generations, will not be viable in the future as the Asia demography shifts towards an older population and away from filial piety.

Technologies also impact the financial services sector and must be embraced by distributors and product manufacturers to ensure their future success. New information technology leads to process enabling and re-engineering within the insurance business chain in particular.

The financial services industry is constantly evolving, it becomes crucial for a firm to gain competitive advantage in the industry so as to succeed, if not, survive.



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