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New Delhi: Indians will have one trillion dollars worth investable wealth by 2012,
with the country¶s robust economic growth driving a four-fold surge from just about
250 billion dollars in 2007.
According to a report by international consultancy firm Celent, India is set to
become a huge hunting ground for wealth managers with the number of their
potential clients and size of manageable wealth both expected to grow four-times
through 2012.
The wealth management market will have a target size of 42 million households by
2012, as against just about 13 million in 2007, noted the report titled µOverview of
the Wealth Management Market in India¶.
³The wealth management sector is poised to witness tremendous growth. India¶s
economic growth is making larger sections of the population prospective customers
of wealth management providers,´ Celent said.
The growth would be seen across all income-levels, but the lower-income segment
would record the maximum growth in terms of volume, while high-networth
households would contribute the most in terms of wealth size, it noted.
Celent has defined a household with a minimum income of $5,000 (Rs2 lakh) as the
lowest end of the target market for wealth managers, while one with at least $30
million (Rs120 crore) of investable income has been put in the category of ultra-
high net worth.
The market would see different products being launched for catering to different
client segments, Celent¶s banking practice and author of the report Ravi Nawal said.
³There is an increasing momentum towards structure in this previously chaotic
domain. We should expect some very India specific innovations in the near future,´
Nawal added.
The market is currently dominated by unorganized players, whose share is 1.5
times that of the organized market. However, a structural change is taking place
and organized players are drawing clients away from the unorganized players.
Wealth management revenues are expected to contribute 32-37% of the total
revenue of full-service financial institutions by 2012, Celent said.
According to the report, mass-market (Rs2-10 lakh of disposable income) would be
a key driver, accounting for 40% of the overall growth in the number of
households.
A majority of wealth managers, except niche players, would target the mass market
because of its youth-dominance and this market would see more service providers
entering the fray with a µown them young¶ policy.
The ultra-high net worth households with wealth in excess of $30 million would
have a total population of 10,500 households by 2012, while the super high net
worth households ($10-30 million) are expected to grow to 42,000.
The population of high net worth households ($1-10 million) would grow to
3,20,000, while there would be 3,50,000 households in the super-affluent category
(Rs50-400 lakh).
-esides, 10 lakh new households would join mass-affluent category (Rs10-50 lakh),
taking their population to 18 lakh by 2012. However, a vast majority of 39 million
households, out of the total 42 million target market population in 2012, would
belong to the mass market (Rs2-10 lakh).
Private banks, independent financial advisors and full service brokerages would
serve the high networth segment, while ultra high networth households would be
served by private banks and family offices.
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The term wealth management also now a days having very importance. So many -anking
companies are engaged in the business of wealth management. The premier insurance
industry is now booming because so many bankers are also adopting and playing safe in the
business of insurance the term called is -ancassurance. Now a days wealth Management
has very craze in the business world. In a survey it was found that India had 100,000
milliners day end of year 2006 is now grow up by 21% from a year earlier (Asia pacific
wealth report).

The term wealth management formed with two words wealth & Management. The Meaning
of Management is form with Manage + Men + 'T' where 'T' stands for the factor time. The
meaning of wealth is ± Funds, Assets, investments and cash it means the term wealth
management deft with funds Asset, instrument, cash and any other item of similar nature.
While defining wealth Management we have to think in planned manner. "Wealth
Management is an all inclusive set of strategies that aims to grow, manage, protect and
distribute assets in a much planned systematic and integrated manner. "

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In India ICICI bank and Axis--ank are very well known banks in the field of wealth
management. ICICI -ank will float subsidiary for the purpose of WM activities in Canada &
other market even as ICICI has rolled out ICICI Group Global Private Clients for those with
net worth of $ 1 million or more. ICICI GCPC launched their business in Dubai very recently
in the month of April-08 and caught 2500 clients. They are going to add another 1000 high
network clients this year.

ICICI -ank is using the services of global players like Merrill Lynch, City group, and U-S for
catching the clients for Wealth Management business. ICICI -ank and its subsidiaries are
engaged in the development of various attractive products (services) for the clients with net
worth of $ 1 million.

The eyes of ICICI Group Global Pvt. Clients on the rising number of dollar millionaires at
present they are 100,000 in number in few year the number will definitely increase. India's
No.2 lender banker ICICI expects to sustain the 70% growth in its private wealth
management business. ICICI has 150,000 customers with investible surplus of at least Rs.
10 lakhs equity, real estate and private equity is driving the private banking business in
India. India has market of wealth management about $ 600 billion.

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One of India's leading private sector banker Axis bank also combined with -anque Privee
Edmond de Rothschild Europe based wealth management expertise institution & is going to
make new standard for the NRI's wealth management.

The LCF Rothschild group has based its reputation in the area of wealth management on its
big banking experience. Actually the institution is engaged in the task of providing financial
advise to the Europe's leading families, Government and various corporations for the last '7'
generations.

The Axis -ank 5th largest bank by market capitalization in India provides payroll services to
over 12000 corporates across 2.8 million salary accounts. The market capitalization of Axis
-ank was 235 million in the last year 2007 is engaged in the business of wealth
management, with its international presence in Dubai, Singapore Hong Kong, Shanghai and
so on.

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(A) Securities Safekeeping


(-) Income collection from Securities
(C) Settlement of Securities trades as directed
(D) Payment of fund when directed
(E) Timely settlement delivery

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%$%&!'$

(A) Charitable Trust


(-) Revocable Trust
(C) Irrevocable life Insurance Trust
(D) Special Need Trust
(E) Institutional Trust

)$!%$*$#+"#$%&!'$

(A) IRA's Custodian Or Trustee


(-) Defined -enefit Plans
(C) Defined Contribution Plans


 : The following are the advantages of wealth management concept.

 $+,-+c#
".+"##!#/: The wealth management professional always shows the
good path to the customers and provide the service of tax planning. How to minimize the
tax and save more money?

( $+,-+c#$+$'!#-c#&$*$#%"$/0: Another advantage from the customer


point of view is with the help of WM Professional the customer can easily know the
investment strategy and analyze risk and return.

) $+,-+c#"$ "#"/$*$#: With the help of wealth management professional we


can also manage our estate. Estate management is a task to provide objective
administration of our funds tailored to aim in responsible distribution and protection of our
overall estate.

1 $+,-+!#-%2"% +3!#/: We can say planning, that recognizes as our estate grows
and changes occurs we require some team of professionals who help us in future planning.

4 $+,-+-%c# !"#'#*0: -anks which are engaged in business of WM earning


revenues from the foreign countries i.e. outsourcing for economy

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1.  $ '$
5$',$- "#"/$*$#: Though we all know that management has
existence at all levels of life and society but the term wealth management only related with
the higher level means rich people, and is not having any plans and provisions for poor and
lower and middle level of society.

(6 5"#'$-7%"  Another demerit or limitation of the WM concept is it is not showing


the actual position. The customer doesn't know about the things going on with using his
wealth and there may be chances of forgery and fraud with customers.

)6'"+!'%$c#-+"!#: What is the actual position of market we don't know


because every thing is done by some WM professionals. So we can not assume our position
in the market that also results in inflation because economy is unknown about the actual
state. There may be chance that the customers are in risk but they are showing the false
return and vice-versa.

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After studying the overall concept of wealth management we can say that it has various
aspects some are favorable and friendly for the Indian economy and some are very
dangerous for the Indian economy. The customers have to beware and they have to make
SWOT analysis before choosing the wealth management option. At present Indian Economy
is facing a lot of trouble by increasing inflation by 11.05% and hike in fuel prices in the
Indian as well as international market. As per Indian concept wealth management can not
success in India. -ut if Indian financial institutions are engaged and choosing the WM
business in foreign countries, most probably middle-east countries, it may be some relief for
the downward moving Indian economy.

$-$%$#'$

-usiness Standard (News Paper). Delhi.


Economic Times (News Paper). Delhi
Financial Express (News Paper). Delhi
Deccan Chronicle (News Paper). Hyderabad
-usiness World (Magazine). Delhi
-usiness Economy (Magazine). Delhi
Economic Political Weekly
www.axisbank.com
www.sbi.co
www.icici.com
www.pnb.com

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Kotak Mahindra -ank Ltd¶s financial services arm, Kotak Wealth Management,
which has Ñ 14,000 crore in assets under management, plans to open more
overseas branches to tap wealthy non-resident Indians (NRIs).

³We see a lot of potential in the NRI community and there is a fair amount of
interest in India across the world,´ said C. Jayaram, executive director, Kotak
Mahindra -ank. ³In addition to India¶s growth story, they also have an emotional
reason to invest in India.´

The Kotak group is present abroad through the offices of its offshore fund, which
manages more than $1.5 billion (Ñ 6,645 crore) in West Asia, Singapore and
London. ³Now we are putting our people there and looking to tap this huge
opportunity,´ said Jayaram, one of the longer serving executive directors of the
bank.

The bank¶s wealth management business has grown consistently over the past 15
years from Ñ 500 crore in assets in the mid-1990s. It is now one of the largest
wealth managers in country. Increasing salaries and higher disposable incomes in
the hands of young professionals has boosted India¶s wealth management business
over the past decade.

According to a recent wealth report by DSP Merill Lynch and ",/$*!#!, the
population of India¶s high networth individuals (HNIs) and their wealth grew 50.9%
and 53.8%, respectively, in 2009. A global wealth report by Credit Suisse Group AG
said total wealth in India has tripled in the past decade to $3.5 trillion.

With the growth in size, the wealth management business is becoming increasingly
competitive. Jayaram said 10-15 years ago, asset management was part of the
Kotak group¶s securities business, and investors came to the company for its
expertise in equity. Much of the investment was old money that investors wanted to
grow.

He said though the industry is likely to grow manifold, it will get more competitive
and customers will benefit. ³Customer are demanding innovative products and at
competitive rates, keeping relationship managers at their toes.´
The government¶s move last year to allow individuals to invest up to $200,000 a
year outside India has also helped wealth managers. Kotak has formed a joint
venture with *8"% c#$%#"!#"+%"#'$, which will offer private
banking products to Kotak¶s customers. ³We expect to grow 30-35% annually over
the next five years,´ said Jayaram

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Wealth management is just emerging in India. The growth of the economy has already
been widely showcased.

Wealth and disposable income are growing substantially. We are also noticing that for
the first time the ability to earn and save are slightly different. Earlier you just put away
your money in some guaranteed products. Today, when even the government is
withdrawing from those products ( it recently stopped the maturity bonus on post-office
savings), investors, whether they be doctors, architects or anyone else, need
professional help.

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It is for everybody. The person who is earning Rs 30,000 per month also needs this
advice. For instance, if there is a 25-year-old guy who earns this sum, his first priority
is to buy a house for, say, around Rs 20 lakh. He has to now protect this property from,
say, flood, cyclone or other natural disasters. Here is where we can help. You have
building insurance that doesn't cost more than Rs 800-1,000. That's what it costs for a
dinner in a good hotel in any city. Why not protect the asset, which you are going to
live in for the next few decades? Similarly, there are other issues, such as protecting
your family from medical emergencies. All these come within the scope of wealth
management services.

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Oil billionaire J Paul Getty once aid that if you had to count your money, you didn¶t have a
billion dollar  By that yard tick, we appear to have about a hundred people in India who
wouldn¶t have to count their money, but many of whom could hire other to do it for them Say
hello to private banking, or wealth management, for the very, very wealthy

Ironically, wealth management i not a very big bu ine  there are about 50 firm that include it
a part of their bu ine e , of which 10-12 offer private banking ervice (the re t are brokerage
hou e and ecuritie firm that offer inve tment product  The total wealth under management
among thi fraternity roughly amount to $20 billion The top five private bank account for
about half that; according to anecdotal evidence, each could manage $1-3 billion

Compare that to a big chunk of bu ine wealth that owner have tied up in their own companie 
even if we a umed that company promoter owned between a third and a half of the equity in
their companie , bu ine wealth in the li ted company alone could be upward of $500 billion at
lea t ² the market capitali ation of li ted companie i of the order of $15 trillion

But the pa t couple of year have been a little hard on the wealth management provider ; India
it elf may not have become a victim, but the ripple effect of the global credit cri i have
neverthele made their pre ence felt Now, a the ituation tabilize , and we remain one of the
few nation continuing to grow, the gravy train i moving again, and gathering pace

   


 
Each year, more wealth i created by a ho t of new entrepreneur riding the India growth tory;
the ame tory i al o fattening the wallet , bank balance and coffer of the already well-off
bu ine familie  Add to them the highly paid CEO , and the rank of the high networth and
ultra high net-worth individual (HNI and UHNI  are welling again

³Entrepreneur dominate the HNI and UHNI category,´ ay Satya Ban al, CEO at Barclay
Wealth India ³A number of non-re ident Indian (NÑI  have added to the number a they
returned from over ea over the pa t two or three year ´ The global environment al o µhelped¶
increa e the number of new entrepreneur a returning NÑI ought to take advantage of a more
optimi tic environment in India

But what about the impact of the cri i on the exi ting rich population? ³Mo t of the alaried
profe ional have not been able to unlock a much of their wealth by moneti ing their employee
tock option (ESOP ,´ ay Ajay Bagga, head of private wealth management at Deut che Bank
India ³But each year, the potential population grow , given the high aving rate (nearly 40 per
cent among individual ´
Mo t of the bu ine familie have not done too badly, though tho e who leveraged their
holding may have had problem  But the degree of leverage i much lower than in other
developed economie  But the experience of the pa t two year have prompted a review of the
quality of ervice offered by wealth management firm , and reoriented expectation 

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³There ha been di ati faction over the poor return , but a greater degree of unhappine over
the poor communication by wealth manager ,´ ay Salil Parekh, executive chairman India at
Capgemini Hi firm, in a ociation with Bank of America-Merrill Lynch, produce the annual
World Wealth Ñeport ³That a e ment i ba ed on anecdotal information, but the next round of
our urvey hould tell u more´

Parekh ay the perception i that a et allocation i becoming far more important to tho e
availing wealth manager ¶ ervice  What¶ more, there¶ a behavioural hift among the client
ba e ³Client now want a greater ay and involvement in inve tment deci ion-making,´ ay
Shiv Gupta, head of private banking at Ñoyal Bank of Scotland ³There i a greater propen ity to
di cu ri k and inve tment objective ´

Private banking goe beyond a et allocation and inve tment advice It i a mix of banking
ervice , inve tment ervice , credit ervice and e tate planning Gupta ay mo t UHNI expect
a olution -ba ed delivery model that cu tomi e their ri k appetite and objective 

For the entrepreneurial HNI, eparating hi bu ine objective and wealth objective can be
tricky; o advi ory ervice can play a key role For e tabli hed bu ine familie , it i to protect
their wealth from the vagarie of the bu ine cycle In ome ca e , it can extend to ucce ion
planning and inter-generational wealth tran mi ion, too


  
Given the potential cale of the bu ine opportunity, it i ea y to imagine that there will be a
great number of private bank entering the bu ine  But the number ugge t a challenge that i
not a ea y a it look  With 80 ba i point (08 per cent of a et being managed a income, the
revenue are about Ñ 500 crore; mo t acknowledge that barring the top four or five private
bank , no one i making any profit 

³The bu ine model thu far ha largely been an undifferentiated one,´ ay Parekh ³So it i
hard to get client to tick if you don¶t increa e the level of hand-holding, give your clientele
deci ion-making tool , and make ervice a per onali ed endeavour´ Mo t wealth manager will
find it hard to agree with that

³Ultimately, what matter i the relation hip; client look for tru tworthine , highly cu tomi ed
ervice and tar quality treatment,´ ay Deut che Bank¶ Bagga ³When you con ider the
inve tment a private bank or wealth management need to make, there¶ a five- to even-year
period before you break even If you have the full uite, rather than ju t tran action ervice , the
better equipped you are´

³It¶ a cliché, but global be t practice are a good guide,´ ay Barclay Wealth¶ Ban al That
extend to ervice quality, too ³Survey done every year ugge t that the quality of ervice rank
di proportionately higher than return on the clientele¶ expectation cale,´ ay ÑBS¶ Gupta In
India, the bu ine ha a long way to go, and firm have a lot to learn Speaking of politician ,
humouri t Fern Naito once aid ³If you got them by their wallet , their heart and mind would
follow´ For wealth manager eeking to keep their client , the rever e hold true
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