Wealth managers hope for integrated monetary authority

The Jakarta Post, Jakarta

As wealth management services become more popular, banks and customers need to really understand what the wealth management profession is all about, an association says.

Certified Wealth Managers' Association (CWMA) chairman Martha Bambang Priambodo said people needed to be able to differentiate wealth managers from other professionals who also deal with money management, such as financial planners and treasurers.

"A wealth manager's duty is to manage, grow and allocate the wealth of his or her customer. What differentiates this profession from that of financial planner is that a wealth manager works for an institution, such as a bank, or an insurance or securities company," he told The Jakarta Post recently.

Bambang said that a wealth manager even dealt with how to bequeath his customers' wealth to their heirs.

"In some developed countries, wealth managers also give advice on fashion and lifestyle. That's why this profession has become number one in the U.S. in terms of generating money, beating lawyers and website managers," said Bambang, who is also vice president of Bank Niaga.

"When customers come to a wealth manager, they not only want to save their money in the bank, but also to grow their cash through various kinds of investments based on the advice of their wealth managers," he said.

Therefore, the profession was linked to related industries, such as the insurance and capital markets industries.

The problem is, Bambang said, that the banking, capital markets and insurance industries all had different regulatory frameworks and regulators, which forced wealth managers to familiarize themselves with all the regulations in the related industries.

"That is why the association focuses on providing education, formulating codes of ethics and promoting the profession to the public," he said.

Founded in July, the CWMA has published a code of ethics for wealth managers that, among other things, requires them to provide accurate and well-researched advice to their clients.

"Wealth managers must advise their clients on how to formulate tax strategy, meaning how to diversify investments to avoid huge taxes, but they are forbidden from advising their customers to evade tax," he said.

CWMA deputy chairman for professional standards and ethical codes, Darmadi Sutanto, said the association provided certification for would-be professional wealth managers to improve their quality.

Bambang hoped this would improve the competence of local wealth managers and allow them to compete against their overseas counterparts.

"We are familiar with the term `UFO', which stands for "Unidentified Financial Officer". They come from abroad to offer their services to rich Indonesians," he said.

"Through this certification program, we hope to boost the competence of local wealth managers and increase their numbers."

At present, Indonesia only has 50 certified wealth managers, a third of the overall CWMA membership of 150.

"We are bringing a roadshow to Yogyakarta and Surabaya to give training to would-be wealth managers. We hope that by the year's end, we will have 150 additional members," Bambang said.

CWMA literature says that a wealth manager must pass a seven- stage course, and study such subjects as investment, legal aspects, and pension and estate management.

"The first six levels can be studied through the Gadjah Mada University's Master of Management program. But the final level should be studied at the University of Greenwich's School of Business in London," Darmadi said.

Another problem faced by wealth managers, Bambang said, was the absence of an integrated monetary authority here that could synchronize banking, capital market and insurance industry regulations.

"We hope the government will establish a financial services authority (OJK) soon," he said. (006)