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Group 4

What is Wealth Management ??

Concept originated in US in the 1990s Wealth management services involve fiduciary responsibilities in providing professional investment advice and investment management services to Institutions, funds (Pension/mutual/Hedge), corporations, trusts as well as HNWIs.

Select Players

Bank of America corporation Barclays PLC BNP Paribas Groups Citibank Credit Suisse Group Deutsche Bank AG HDFC bank limited State Bank of India

HSBC Holding PLC ICICI Bank limited ING Group N.V. JP Morgan Chase & Co Merrill Lynch & Co. Inc. SG Asset Management Standard Charted PLC

Why do people opt for wealth management solutions?

Until the early 1990s the investment was restricted largely to real estate, bonds, fixed income and gold Opening up of the equity markets has caught the imagination of the masses Equity related products are highly volatile and react to events within and outside its domain

Segmentation and Targeting

Investible Surplus
More than INR 1 Crore
INR 25 Lakhs to 1 Crore INR 3 Lakhs to 25 Lakhs

Ultra High Net Worth Class

Target Segment s

Top Tier Private Banking Mass Affluent Segment Emerging Affluent Segment

Premier Class

Emerging Class


Customers are inclined to seek professional wealth management but are very less trusting & sceptical now Wealth management provider should be positioned as:
Trustworthy Relationship-oriented


service provider

Key Elements of Wealth Management Services

Depending on the mandate of the services given to the Wealth Manager, wealth management services could be packaged at various levels:

Processing (transaction oriented) Custody, Safekeeping and Asset Servicing End-to-end Investment Lifecycle Management


Wealth mangers role is limited to the extent of providing guidance on investment / financial planning and tax advisory, based on client profile. Investment decisions are solely taken by the client, as per his /her own judgment.

Investment Processing (transaction oriented)

Client engages wealth manager to execute specific transaction or set of transactions. Investment planning, decision and further management remain vested with the client.

Custody, Safekeeping, Asset Servicing

End-to-end Investment Lifecycle

Client is responsible for investment planning, decision and execution. Wealth manager is entrusted with management, administration and oversight of investment process.

Wealth manager owns the whole gamut of investment planning, decision, execution and management, on behalf of the client. He is mandated to make financial planning, implement investment decisions and manage the investment throughout its life.

Major products offerings

Portfolio management services (PMS) Mutual funds Insurance products Equity Fixed income instruments Mortgage lending Real estate Art funds Derivatives and structured products

Revenue Model

Fee Based

in Latin America & Europe A fixed amount charged as customer fee in return to the advisory

Commission Based

Prevalent in US & Asia Upfront Commission Installments

Bank Branches

Selection of major outlets Catchment Analysis Mostly Pan India Majorly in Metros & Tier 1 cities

Marketing Aspect

Brand building

& promotional activities Events Building trust

Customer Engagement
BTL Activities


together, movies etc.

Marketing Aspect

Main expenditure on:


& implementing the communication

strategy Color, Look & Feel of the brochures, Cards etc.

Marketing Aspect

Other Players

Advisory Approaches

Transactors Product Expert: Handles high-volume transactions involving sophisticated products or asset classes, such as foreign exchange derivatives. Investment Broker: Handles transactions involving basic asset classes, such as equities, fixed income and options. Investment Managers Investment Advisor: Offers strategic investment planning, as well as playing a hands-on role in constructing, reviewing and rebalancing client portfolios. Relationship Manager: Establishes and nurtures client relationships, delegating portfolio management to internal or external managers. Wealth Planners Wealth Planner: Offers holistic advice in accordance with clients finances and short/long-term goals, such as real estate, retirement and generational wealth transfer.

Wealth Management Overview

Customer Profiling

Engage and Identify Customer New Sourcing Referrals Events

Discover the customer Needs Financial Goals Risk Apetite

Customer Profiling (Contd.)

Financial Goals Accumulation Phase Transition Phase Distribution Phase
Recomme nd Discover Enquire

Risk Appetite Aggressive Secured




Tangible Aspects

Bank Outlet Forms Bond Papers Cards Brochures

The Challenges of Wealth Management in India

High entry barrier for both new players and existing player Restrictive regulatory environment Conservative mind Highly Personalized and Customized Services Personal relationship driving the business Evolving Client Profile Client Involvement Level Passion Investment Limited Leveraging Capabilities of Technology Intricate Knowledge of Cross-functional Domain


Build your brand and focus on overcoming the trust barrier. Invest in advisor technology to improve advisor productivity and retention. Evaluate a partnership-based model, coupled with innovative use of technology, to increase reach. Focus on transparency and compliance, while targeting customers with attractive, segment focused products.

Thank You

Demographics of HNWI

Growth in the investible table

WM Objectives & Preferred Channels

Business Models & Main Players


Asset Mix: Asset mix is the allocation of a portfolio between asset classes, it balances return and risk. Returns are a combination of the income from an investment and the price appreciation over the period. Different asset classes include:
Fixed Deposits Mutual Fund
A Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in the offer document. Diversification reduces risk as all stocks may not move in the same direction in the same proportion at the same time The performance of a particular scheme is denoted by Net Asset Value (NAV)

Equity Investment Generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises When the investment is in infant companies, it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going-concern situations.

Deposit a lump sum of money for a fixed period ranging from a few weeks to a few years and earn a predetermined a fixed rate of interest +ves: Safe, regular interest income - ves: lesser returns than stock markets, doesnt offer protection against inflation

Commodities Market

Real Estate Funds


Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts.

The growing increase in the industrial, commercial and residential projects have boosted the real estate market in India. Leading real estate funds are: HDFC Property Fund, DHFL Venture Capital Fund, Kotak Mahindra Realty Fund, India Real Estate Mutual Fund

Given the huge quantity of hoarded gold, compared to the annual production, the price of gold is mainly affected by changes in sentiment, rather than changes in annual production. Gold becomes desirable in times of bank failures, low or negative real interest rates, war, crisis etc.

Other assets include: Insurance Products Structured Product Currency Art Fund