INDIA The New Hub for Wealth Management

• India is the world’s second fastest growing market for wealth management firms.... But i can assure you one thing that even posh or robust wealth management in india cannot buy you trust.......


• Why i am saying this ? ... Well traditionally Indian HNI's have been putting money under safe's built stealthily in their homes, or under the matresses or over the ceilings in pop... etc. etc.. also dont forget swiss bank, mauritian banks or schchheles like tax heavens... Again the Indian HNI's dont try to keep all their money under one basket of a firm.. so they dont even retain a firm consistently..


• Compare the analogy of Indian HNIs with global scenario.. In Europe, e.g. Wealth Managers even open a client's mails! thus you see people there retaining a Wealth manager for generations! can you hope to see that in India? i guess no...


• But India is a prime target of global wealth management firms like Merrill Lynch, Lehman Brothers, Citigroup, Morgan Stanley, UBS securities, Credit Suisse etc..


• Lets examine the deal in detail....
  

See these global facts & figures: (2006)

• 9.5 million people globally hold more than US$1 million in financial assets.


• HNWI wealth totals US$37.2 trillion.


• Wealth generation was driven by real GDP gains and continued market capitalization growth


• Singapore, India, Indonesia and Russia witnessed the highest growth in HNWI populations


• India has second highest Real GDP growth rate in the world at 9% for FY06 next only to China at 10.5%.


• Market Capitalization Rise & Returns chart:

To read the contents of the image properly click to open it separately in a new web page or copy it on your computer and open it from there.. its a safe file to save & open.. sorry due to technological limitation of not to open it here perfectly

Destination India:

• Thus India is clearly a sought after destination for wealth management companies......
  
• As of 2006 the number of HNIs in India is around 100,015 who are true billionaires..
  
• Bloomberg report of year 2005 showed that approximately $10 billion (Rs 40000 crore) in HNI assets were under management in India then.... Now it is estimated to be around $20 billion (Rs. 80000 crore) approximately as AUM of HNIs.

Points to Ponder:

• We believe the key to this market is the use of need based positioning and customization of services taking care of client perspective..


• Also one more asset in this business is The Relationship Manager. They are the life blood as well as heart of this business.....


• A Delloitte report of year 2006 also says that in banking industry this segment is the most profitable one owing to the HNIs capability of huge 1 time investment capability..
  
  

Winning the Hurdle Race:

• There is a dearth of Regulation in this sector....
  


• RBI has just recently only allowed individuals to invest upto $100000 dollars (Rs. 40 lakhs) per annum abroad...


• Also there is a misconception in India between Wealth Management and Private Banking. We must say here that Wealth mangament is private money management aimed as per the client's profile or needs..
  While private banking is a sort of retail banking or mass based affluent banking which caters to sell all range of products... Thus people in india mix private wealth management with private or previlege banking...


• One more cache here is that .. In India many a times Advisory & Distribution are not segregated...
  So you will find a wealth manager charging a client by investing in the mutual fund products sold by their AM company for which he will charge double fees.. 1. annual portfolio management charges and 2. additional charges for investing in their own MFs calling them Management fees....


• This is sheer cheating ! As in this case the wealth manager will always be keen to sell products rather than giving advice... Actually these people can't be called wealth managers at all....


• Also a lot of taxation related ambiguity prevails in India making the conventional billionaires even more circumspect and orthodox in approach.


• Thus a lot needs to be done on the regulatory field...

• But clearly this market segment has a potential being rich gettin richer and richer..
  


• So all those who are at the start of their career can surely aim at making their career in Wealth Management....
  


• Once again we congratulate india for becoming world's second fastest growing wealth management market

Source for the news article:– Bloomberg, Merrill Lynch, Capgemini, The Business World, The Economist Intelligence Unit, moneycontrol.com, the hindu etc etc.. we thank them providing us this great information source.