The Taiwan Banker

Following a continuous stream of cases in 2020 in which wealth managers stole large amounts of money from their clients, shaking popular trust in wealth management, regulators have increased their penalties. In particular, as the FSC has assiduously promoted its “New Wealth Management Plan,” aiming to improve Taiwan’s financial competitiveness through looser laws and abundant domestic capital, social trust in the finance industry has become all the more important. Rebuilding the confidence of domestic consumers and high-asset clients will be key for Taiwan in its efforts to develop a wealth management industry. In all fairness, although the number of reported embezzlement cases and their amounts are staggering, they are extremely limited in comparison with Taiwan's overall asset management market. The vast majority of financial practitioners abide by the rules, and remain dedicated to their clients and employers; nevertheless, the actions of a few tarnish the overall image of the industry. In fact, it was banks’ internal audit and control mechanisms which caught most of last year’s cases. Others were also discovered by other managers following rotation in accordance with the FSC’s “10 commandments of wealth management.” In fact, many wealth managers and insurance representatives actively help customers prevent theft, fraud, or policy misappropriation in their daily work. Financial professionals may even be able protect clients’ assets better than their family members. It’s undeniable that the financial industry, which used to mainly rely upon interest margin income, has been increasingly challenged by the low-rate environment; fees and operations income have risen proportionally. In this rate structure, financial institutions which blindly pursue growth in service fees, turning this income into an indicator for promotion while ignoring legal compliance and professional ethics requirements, may grow in the short term, but this approach severely impacts their long-term branding. The industry as a whole must work together to prevent the spread of fraud. If the heads of wealth management departments pursue returns at all costs, others may follow suit, destroying trust in the industry. Therefore, both front-line personnel and senior management should be knowledgeable enough to avoid participation in untoward schemes. They should immediately correct bad behavior by dint of their values and independence, not just legal compliance, helping encourage the whole industry to remain above-board. There’s still more that can be done. In the past, hiding the faults of others and praising their good work was regarded as an important social virtue. Work was used to establish a model of behavior. In the modern media ecosystem, however, doxing and piling-on have become commonplace. Helping people from all walks of life discover and publicize the good work of the finance industry, and helping people in the industry emulate good behavior, are all important to rebuild trust. As more people experience the good of the finance sector, its foundations will carry more weight.