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FPA in China: Why It Matters for Investors, Clients and, Most Important, Advisors

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China is already the world’s second largest economy, and great wealth is being created for its citizens—and for those who invest wisely in China. It might surprise many in the U.S. that financial planning is already a thriving profession in this populous, fast-growing country. But what does it mean to be a financial planner in China?  How can the Chinese economy maintain its rapid growth? What is the best way to invest in this economic success story?

A 44-planner delegation from the Financial Planning Association expects to gain answers to those questions during its goodwill tour of China from May 25 through June 4. To support the trip and deliver some of those answers, AdvisorOne will be presenting news and analysis focusing on China at a special FPA in China home page, highlighted by first-person daily blogs from several of those 44 planners, including delegation leaders and former FPA Presidents Dan Moisand and Richard Salmen.

Reporting from Beijing, Shanghai and other cities in China, those daily dispatches will be enhanced by photographs documenting the sights but also the gatherings of American and Chinese financial planners.

marv tuttleAs FPA Executive Director Marv Tuttle (left) explains in a video with AdvisorOne and Investment Advisor’s John Sullivan exploring the largest planner group’s goals, this is the third bridge-building overseas trip sponsored by the FPA.  The delegation’s members intend “to share best practices, and learn best practices” from their Chinese financial planner counterparts, says Tuttle.

“Part of what we hope to accomplish is getting to know our fellow financial planners around the world on both the individual level and the professional organization level,” says Salmen, senior vice president of GTRUST Financial, in a pre-trip interview with AdvisorOne. “The world is getting flatter all the time; as planners we are already serving clients with dual country residences or are working outside the country.”

“China has a very well established financial planning community, there are several thousand planners eager to meet with us,” says Moisand, principal of Moisand, Fitgerald, Tamayo, LLC, in another part of the interview. “Around the planet, financial planning already has standards and processes. The Chinese model may be different, but the process is the same, helping families achieve their financial goals.”

The delegation’s schedule includes small-table discussions with 45 Chinese financial planners, participation in a financial planning symposium attended by nearly 300 financial planners, talks with university faculty and students, meetings with a private banking group, and a visit to the Shanghai stock exchange.

bob reynolds“What happens around the world” affects advisors and clients in the U.S., Bob Reynolds (left), CEO of Putnam Investments, said in a Thursday interview, noting that half of all U.S. debt is held overseas, much of it in China. Moreover, he points out that a significant part of the companies in S&P 500 derive their revenue from international operations.

Still not convinced of the importance of China to advisors and their clients? 

Consider this: If you are reading this article on an iPad or an iPhone, it was designed in California by


Apple, as those devices' packaging materials proudly state. However, chances are good that your iPad or iPhone was made in China by a Taiwan-based company, Hon Hai Precision Industry Co.

And finally, consider this as just another not-so-small example of China's present and future market power. A front-page article in the May 26 edition of The Wall Street Journal discusses how U.S. and other companies are increasingly using stock exchanges other than the New York Stock Exchange or even Nasdaq as the venue for ther IPOs. That means London, but also Hong Kong, among other exchanges and for a host of reasons.

In the article, NYSE Euronext CEO Duncan Niederauer is quoted as saying that "the capital markets are global just like every other industry." Regardless of whether NYSE Euronext merges with Deutsche Borse, Niederauer says that "there are 5,000 more public companies in China" coming to market" over the next 10 to 15 years.

In an expanded version of the article on the WSJ blog, Niederauer waxed on the theme. "If you believe that their economy will grow to our size," he continued, "and you believe that they’re on the margin doing a slightly better job of helping smaller companies [go public] because they know it’s the job creation engine, there is going to be more [IPO] issuance in the emerging part of the world than there is in the United States."


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