Wealth Management Sector - Opportunities and Challenges

A
PROJECT REPORT ON
WEALTH MANAGEMENT SECTOR
OPPORTUNITIES & CHALLENGES
SUBMITTED TO
B.K. SCHOOL OF BUSINESS MANAGEMENT
2009-2010
PREPARED BY
JIGAR MODI - 1869
PRATIK SHAH - 1893
B. K. School of Business Management
Gujarat University
Ahmedabad
CERTIFICATE
This is to certify that „Mr. Jigar Modi’ and „Mr. Pratik Shah’, students of MBA (2008-
10/11 batch) at B. K. School of Business Management, Gujarat University,
Ahmedabad have prepared a Project Study Report on “WEALTH MANAGEMENT
SECTOR OPPORTUNITIES AND CHALLENGES” in partial fulfillment of two years
full-time MBA Programme of Gujarat University. This project work has been
undertaken under the guidance of „J.M.Bhatt’ core faculty at B. K. School of
Business Management, Gujarat University, Ahmedabad.
This is also to ascertain that this project has been prepared only for the award of
MBA degree and has not been submitted for any other purpose.
‘Prof. J.M.Bhatt’ Dr. Sarla Achuthan

Professor Director
Date: 05-03-2010
Place: Ahmedabad
Wealth Management Sector: Opportunities and Challenges

‘WEALTH MANAGEMENT SECTOR
OPPORTUNITIES AND CHALLENGES’
A Project Study Report
Submitted to
‘Prof. J.M.Bhatt’
In Partial fulfillment of requirement of two years (or three years)

Master of Business Administration programme of Gujarat University,
Ahmedabad
Submitted By
‘Jigar Modi & Pratik Shah
(MBA Batch 2008-10/11)
B. K. School of Business Management

Gujarat University, Ahmedabad

UNDERTAKING FROM STUDENTS
This is to certify that the information contained in the Project Report titled WEALTH
MANAGEMENT SECTOR OPPORTUNITIES AND CHALLENGES has been
prepared by us on the basis of data collected by us from various secondary as well
as primary sources. We would be solely responsible for piracy or plagiarism of any
information included in this report.
Jigar Modi Pratik Shah

B. K. School of Business Management B. K. School of Business Management
MBA Batch 2008-10/11 MBA Batch 2008-10/11
Date: 05-03-2010
Place: Ahmedabad

ACKNOWLEDGEMENT
Through this acknowledgement, we express our sincere gratitude
towards all those people who have helped us in the preparation of this
project, which has been a learning experience.
We appreciate the co-operation extended by Wealth Managers and
People whom we approached for the purpose of surveyed, the wealth
manager and people who gave us valuable information.
We would like to thank the Director Dr. Sarla Achuthan, the Faculties,
the librarian and administrative staff of B.K. School of Business
Management.
Finally we express our sincere thanks to Prof. J.M Bhatt who guided us
through out of the project and gave us valuable suggestion and
encouragement.

PREFACE
As a part of the course curriculum, the student of Fourth Semester of

MBA is required to prepare a Grand Project Report. The objective
behind preparing this grand project report is to relate the management
subjects taught in the classroom to their practical application.
The preparation of this report is based on facts and findings noted during
surveys, information received from written and published documents and
the secondary information.
The scope of Project report is limited to the finding out the opportunities
and challenges available in wealth management sector.
In spite of our best efforts, there may be errors of omission and

commissions, which may please be excused.

EXECUTIVE SUMMARY
"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."
Wealth management is a service provided by financial institutions to help high net
worth individuals protect and grow their wealth. This advanced investment advisory
discipline involves providing a diverse range of services, such as financial planning,
investment management, tax and cash flow and debt management, based on client
requirements.
India represents one of the greatest opportunities to wealth managers over the
coming decades. Even in today‟s financial environment, the wealthy population in
India is large and growing, yet the market is served by an underdeveloped Wealth
Management industry.
Functional Areas of Wealth Management are Financial Planning; Portfolio Strategy

Definition which includes Asset Allocation, Strategy Implementation and Portfolio
Management – Administration; Performance Evaluation and Analytics; Strategy
Review and Modification. So that efficient wealth management is possible. For the
wealth management purpose various asset classes have taken into consideration
like share, property, cash and fixed income securities.
For the purpose of project, we made survey of consumer as well as wealth manager.
From the survey we able to understand about wealth management process, role of
wealth manager, expectation of clients and wealth manager from each other.
With using porter model, we able to find the scenario of industry and we conclude
that the industry is very attractive. There are plenty of opportunities available in the
industry. The size of market is growing due to increase income of upper middle class
and middle class people. The key challenges area are unawareness about the
wealth management services, creating trust with client, back door entry by banks
and turf competition from individual service provider.

TABLE OF CONTENTS
NO. SUBJECT PAGE NO.
1 Objectives 1
2 Concept of Wealth Management 2
3 Scenario of Wealth in World 4-12

State of World „s Wealth 4
State of Asia- Pacific „s Wealth 7
Wealth Management in India – Emerging Sector 12
4 Wealth Management Services 13-24

Investment Planning 14
Insurance Planning 15
Retirement Planning 17
Asset Protection 19
Tax Planning 21
Estate Planning 23
5 Functional Area of Wealth Management 25
6 Asset Class 28
7 Wealth Management Process 30
8 Key Element of Wealth Management 34
9 Wealth Management firms in India 35

TABLE OF CONTENTS
NO. SUBJECT PAGE NO.
10 Consumer Survey and Analysis 46-55

Consumer Survey 46
Analysis of Consumer Survey 55
11 Wealth Manager Survey 56-61

Wealth Manager Survey 56
Analysis of Wealth Manager Survey 57
Expectation of Wealth Manager 58
Purpose and role of Wealth Manager 59
Wealth Management Practice Orientation 60
How Wealth Management Firm Operate in India 61
12 Top 10 Wealth Management Mistakes 62
13 Porter Analysis Of industry Attractiveness 69
14 Conclusion 71-77
Opportunities for Wealth Management Sector in India 71
Key Challenges Area for Wealth Management Sector 75
15 Sources of Information 78
16 Annexure 79-81
Questionnaire of Consumer Survey 79
Questionnaire of Wealth Manager 81

OBJECTIVE
Indian Economy is continuous growing more than 6% p.a. Disposable income of Indian
citizen is growing at very high rate. India has 10 th highest number of millionaire and rate
of growing is much higher than other countries
As people are become wealthier, there is need for systematic management of their
wealth. The rate of growing wealth in Upper Middle Class and Middle Class is very high.
They represent highest amount of saving and investment. There are various reason for
that.
As people become more awake and caution about their proper managing wealth, there
are plaintiff opportunities available in wealth management sector. In India, wealth
management sector is underdeveloped. As financial sector reforms and relaxed
regulatory framework allowing wealth management sector to become more open and
competitive. There are few players in wealth management sector which providing
services to Ultra high networth to High networth Individuals. There are mass-affluent
and mass- market available in wealth management sectors, which was ignored by large
players.
Opportunities does not come alone, it come with various challenges. Wealth
management services are new to mass-affluent and mass- market, they are unaware
about wealth management. So first major challenges is o create awareness. They are
other challenges also for wealth management.
On basis of that, we have selected the main objective of our project is “Opportunities
for Wealth Management sector and Challenges for Wealth Management Sector”.
Wealth Management Sector: Opportunities and Challenges 1

CONCEPT OF WEALTH MANAGEMENT
The term Wealth management formed with two words: Wealth & Management. Wealth
can be defined as an abundance of items of economic value, or the state of controlling
or possessing such items, usually in the form of money, real estate and personal
property. The meaning of Wealth is - Funds, Assets, investments and cash.
Management is the art of getting work from other people with the best possible means.
"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".
Wealth management deft with funds Asset, instrument, cash and any other item of
similar nature. While defining Wealth Management They have to think in planned
manner.
There are two aspects to the wealth management process; protecting assets from
creditors, market crashes or slowdowns, taxes, lawsuits and other unexpected events,
and growing asset values through methods that actively manage risk and reward
profiles to clients needs.
Wealth management is a financial service concept that emerged as a specific offering

during the decade of the 1990‘s. Generally, firms that offer a wealth management
package provide a wide range of financial services to their clients that will include such
basic elements as estate planning, asset management, and even private banking
options. The use of a wealth management service can be helpful when an individual has
amassed a large amount of assets and needs assistance in managing all of them
effectively.
In the best examples of wealth management, the client will be able to take advantage of
a wide range of services that can include the management of everything from the
mundane daily task of balancing the checkbook to long range planning for a trust or
estate. One of the more popular aspects of a wealth management package is managing

investments and managing the tax planning that is associated with the task. The
financial service can also be helpful for people who are just beginning to amass a large
number of assets, and would rather spend time dealing with other issues than managing
finances.
Because wealth management is a form of private banking services, persons wishing to

enter the field usually prepare by obtaining educational credentials that are directly
connected to financial disciplines. A wide range of professionals may be involved in the
extension of wealth management services. Attorneys, certified public accountants,
insurance professionals and brokers may all be involved in providing services to wealth
management clients. In recent years, accredited courses and seminars on wealth
management have become more common as the demand for this type of service has
increased.
The services included with a wealth management package will often include
management of the investment portfolio, with brokers empowered to buy and sell on
behalf of the client. Attorneys will help to structure family corporations, trusts, and other
components that can make estate planning more complete. When it comes to taxes, a
wealth management service will also prepare all reports and returns, offer advice to the
client on tax elements involved with various aspects of the estate, and in general
provide advice that is in the best interests of the client.

STATE OF WORLD’S WEALTH
At the end of 2008, the world‘s population of high net worth individuals (HNWIs) was
down 14.9% from the year before, while their wealth had dropped 19.5%. The
unprecedented declines wiped out two robust years of growth in 2006 and 2007,
reducing both the HNWI population and its wealth to below levels seen at the close of
2005. Ultra-HNWIs suffered more extensive losses in financial wealth than the HNWI
population as a whole. The Ultra-HNWI population fell 24.6%, as the group‘s wealth
dropped 23.9%, pushing many down into the ‗mid-tier millionaire‘ pool.
The global HNWI population is still concentrated, but the ranks are shifting. The U.S.,
Japan and Germany together accounted for 54.0% of the world‘s HNWI population in
2008, up very slightly from 53.3% in 2007. China‘s HNWI population surpassed that of
the U.K. to become the fourth largest in the world. Hong Kong‘s HNWI population
shrank the most in percentage terms (down 61.3%).
HNWI wealth is forecast to start growing again as the global economy recovers. By
2013, we forecast global HNWI financial wealth to recover to $48.5 trillion, after
advancing at a sustained annual rate of 8.1%. By 2013, there is expectation that Asia-
Pacific to overtake North America as the largest region for HNWI financial wealth.
At the end of 2008, the world‘s population of high net worth individuals (HNWIs) was
down 14.9% from the year before, while their wealth had dropped 19.5%. The most
significant declines in the HNWI population in 2008 occurred in the three largest
regions: North America (-19.0%), Europe (-14.4%) and Asia-Pacific (-14.2%). But
behind the aggregate numbers lie some interesting developments in the HNWI
populations of those regions. The number of HNWIs in the US fell 18.5% in 2008, but
the US is still the single largest home to HNWIs, with its 2.5 million, which is 28.7% of
the global HNWI population.

Sources : World Wealth Report 2009 by Capgemini and ML
Capgemini and Merrill Lynch Global Wealth Management report also finds that the
current financial crisis and economic uncertainty has had a large impact on HNWIs and
their lifestyle spending, with luxury goods makers, auction houses, and high-end service
providers reporting significantly reduced demand worldwide. Fine art has remained the
primary passion investment for ultra-HNWIs in 2008 (27% of their total passion
investments). Lifestyle spending rose on Health/Wellness, where 54% of HNWIs
globally said they increased spending, but dropped on luxury travel and luxury
consumables.
It seems that the recession has taken its toll on charitable giving as the year
progressed, with little change in the first half the year but severely impacted in Q4 as
HNWIs gave less and focused on fewer causes. The outlook for Philanthropy in 2009 is
poor with 60% of North American HNWIs saying they would be giving less due to the
economic downturn. Japan was the only country that forecasted a growth in charitable
donation

HNWIs increased the proportion of their assets held in safer, simpler, more tangible
investments in 2008, and reduced their relative holdings of equities and alternative
investments. As global stock markets sold off in 2008, HNWIs joined those retreating
from equity investments. Accordingly, the proportion of wealth allocated to equities by
HNWIs globally dropped by 8 percentage points (to 25%).
Sources : World Wealth Report 2009 by Capgemini and ML
North American HNWIs also significantly reduced their exposure to equities—an asset
class they have long favored— to 34%, from 43% in 2007, but that was still 9
percentage points above the global average allocation to equities.
Elsewhere, HNWIs also scaled back on their equity holdings amid stock-market volatility
and declines. The allotment was 21% in both Europe and the Middle East by the end of
2008, down 10 percentage points from 2007 levels in each case. In Latin America, it
was down 8 percentage points to 20%.

STATE OF ASIA – PACIFIC’s WEALTH
For the Asia-Pacific region, the fallout from the global economic downturn struck
with unexpected speed and force, erasing any notion that the region might be
immune to crises originating in geographically distant and more financially
sophisticated markets. As the markets of the Asia -Pacific region are far from
homogenous, the impacts of the crisis were not always evenly distributed, but
the net result was widespread damage to the wealth and a decline in the number
of HNWIs. Asia Pacific Wealth Report 2009 findings show that HNWIs began to
lose trust in the markets, regulators, and, in some cases, their financial advisory
firms. Restoring trust and confidence in the markets and the industry are
resounding themes as time move forward.
After experiencing rapid growth for three years, the size and wealth of the HNWI
population in the Asia-Pacific region shrank significantly in 2008. By the end of 2008,
the region's HNWI population was down 14.2% from a year earlier to 2.4 million
compared with a 14.9% decline in the global HNWI population. HNWI wealth was down
22.3% to US$7.4 trillion vs. 19.5% globally, after experiencing double-digit growth in
2006 and 2007. Ultimately, the region's HNWI population and its wealth ended 2008
below the levels seen at the end of 2006.
Average financial wealth per HNWI declined 8.8% in the region to US$3.1m in 2008,
after growing at a sustained 3.0% per year from US$3.2m in 2005 to US$3.4m in 2007.
At US$4.9m, Hong Kong still had the highest average financial wealth per HNWI in the
region, despite experiencing the largest erosion of HNWI wealth on aggregate. Almost
two-thirds of Asia-Pacific's markets were below the global average financial wealth per
HNWI of US$3.8m.

Sources : Asia Pacific Wealth Report 2009 by Capgemini and ML
The region's Ultra-HNWI population declined by 29.6% to 14.3k individuals, compared

with a 24.6% decline in the global Ultra-HNWI population, and their wealth declined
35.1% vs. 24.0% globally. Asia-Pacific Ultra-HNWIs had allocated more of their
investments than those in other regions to volatile assets such as real estate and
alternative investments - at the end of 2008, 30% of their assets were in real estate and
alternative investments, compared with 26% among Ultra-HNWIs globally. As a result,
they suffered disproportionate losses, and those losses pushed a greater-than-average
number out of the "Ultra" category.
At the end of 2008, Asia-Pacific Ultra-HNWIs accounted for only 0.6% of the region's
entire HNWI population, less than in any other region, but the segment still accounted
for 22.5% of the region's HNWI wealth.
India's HNWI population shrank 31.6% to 84k, the second-largest percentage decline in
the world, after posting the fastest rate of growth (22.7%) in 2007. India, still an

emerging economy, suffered declining global demand for its goods and services
causing GDP to slow, and a hefty drop in market capitalization (-64.1%) in 2008. At the
end of 2008, HNWI wealth was down 29.0% to US$310 billion, with the largest losses
among those in the $1m-$5m wealth band (-31.8%).
HNWIs in the Asia-Pacific region have always tended to favor cash-based investments
more than their peers in other regions, but that preference was compounded by the
economic uncertainty of 2008. By the end of the year, Asia-Pacific HNWIs had allocated
29% of their assets to cash/deposits, compared with the 21% global HNWI average, as
they sought to minimize their risk exposure, increase portfolio liquidity and create more
flexibility for managing their assets.
However, that regional average is somewhat inflated by Japan, whose HNWIs account
for more than 43% of the region's overall HNWI financial wealth. Japanese HNWIs have
long held their financial institutions in high regard and view domestic banks as a safe
haven in times of economic downturn. As a result, they are willing to hold cash/deposits

in Japanese institutions despite yield s being close to zero. Japan's HNWIs again
held more of their financial wealth in cash/ deposits (30%, see Figure 7) than any other
asset class in 2008. Excluding Japan, Asia-Pacific HNWIs allocated 26% of assets to
cash/deposits.
HNWIs in Taiwan had the highest cash/deposit allocations (41%). The Taiwanese stock
markets plummeted (-46.3%39) in 2008, so HNWIs sought refuge in more conservative
investment vehicles in a bid to preserve capital.
In a few countries, cash/deposit allocations are significantly lower than the regional
average, including Australia (19%) and India (13%), where other assets typically yield
higher returns (such as real estate in Australia and fixed maturity plans in India).
In Asia excluding Japan, 29% of cash-based investments were held outside of the
formal banking system (e.g., in a vault) at the end of 2008, compared with the global
average of 19%. This largely reflects the lack of confidence HNWIs have in the region's
emerging-market banking systems, which tend to be less transparent than those in
more developed markets.

The net growth in global financial wealth is projected to be largely driven by China, India
and Japan over the next few years, leaving those countries with a substantially larger
share of global wealth within the next decade (see Figure 13). While Japan will still play
a central role as a key market in the region, India and China are projected to display far
higher wealth growth rates (~14% and ~12%, respectively, compared to ~7% for
Japan)56. With China and India having the highest GDP growth rates in the region, they
maintain their status as prime markets to invest for the long-term. Wealth management
firms that are able to secure an early presence in these already booming, but still
nascent markets will be in a unique position to capture future opportunities there.
Indeed, many global wealth management firms have entered China or India since 2008,
and local banks and wealth management firms are expanding their operations by
focusing on two main business opportunities:
 Untapped market potential

 Potential for innovation around product mix and/or new customer segments
However, wealth management firms must thoroughly understand these key drivers of
growth, and how they intersect with the regulatory regime, in order to make the right
tactical and strategic decisions to capture the opportunity in these still-challenging
markets.

WEALTH MANAGEMENT – AN EMERGING SECTOR IN INDIA
India represents one of the greatest opportunities to wealth managers over the coming
decades. Even in today‘s financial environment, the wealthy population in India is large
and growing, yet the market is served by an underdeveloped Wealth Management
industry.
According to the report, India is slated to become a US$1 trillion market (in assets under
management) for wealth management providers by 2012, with a target market size of
42 million households In the annual survey done by Cap Gemini, SA and Merrill Lynch it
was found that ranks of millionaires grew 6% in the previous year, because the number
of richer people grew in India & China where India is competing China. India & China
posted the biggest gain in millionaires advancing by 23% & 20% respectively. When
They are watching the world wide increase in number of millionaires the facts collected
by Cap Gemini, S.A. and Merrill Lynch survey report. India has 23% growth in the year
(2006-07). The biggest Asian economy China stands on second position with 20%, west
Asia 16%, United States 4% and United Kingdom (UK) 2%. So they can understand that
there are more opportunities in the Wealth management business in Asia especially in
India.
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 ‗Overview of the
Wealth Management Market in India‘.

WEALTH MANAGEMENT SERVICES
Wealth management offers the following services:
 Investment planning: assists a person in investing his/her money into various

investment markets, keeping in mind his/her investment goals.
 Insurance planning: assists a person in selecting from various types of insurances,
self insurance options and captive insurance companies.
 Retirement planning: is critical to understand how much funds a person require in
his/her old age.
 Asset protection: begins with his/her financial advisor trying to understand his/her
preferred lifestyle and then helping a person deal with threats, such as taxes,
volatility, inflation, creditors and lawsuits, to maintaining this lifestyle.
 Tax planning: helps in minimizing tax returns. This might include planning for charity,
supporting his/her favorite causes while also receiving tax benefits.
 Estate planning: helps in protecting a person and his/her estate from creditors,
lawsuits and taxes. This service is critical for every person whose net worth is high.
 Business planning: This service aims at optimizing the tax free advantages of
running his/her own business.

INVESTMENT PLANNING
Everyone needs to save for a rainy day. Once a person has saved enough to take care
of emergencies, a person should start thinking about investing and to make his/her
money grow. A person should plan his/her investments so that a person can reap
adequate benefits and achieve his/her financial goals.
Investment Planning Process includes:

 Risk Profiling
 Asset Allocation and Portfolio Construction
 Creation and Accumulation of Wealth through Systematic Investment Plans (SIP)
 Regular review of progress and Portfolio Rebalancing
Essentially, Investment Planning involves identifying his/her financial goals throughout

his/her life, and prioritising them. Investment Planning is important because it helps a
person to derive the maximum benefit from his/her investments.
His/her success as an investor depends upon his/her ability to choose the

right investment options. This, in turn, depends on his/her requirements, needs and
goals. For most investors, however, the three prime criteria of evaluating any
investment option are liquidity, safety and return.
Investment Planning also helps a person to decide upon the right investment strategy.
Besides his/her individual requirement, his/her investment strategy would also depend
upon his/her age, personal circumstances and his/her risk appetite. These aspects are
typically taken care of during investment planning.
Investment Planning also helps a person to strike a balance between risk and returns.
By prudent planning, it is possible to arrive at an optimal mix of risk and returns, that
suits his/her particular needs and requirements.

INSURANCE PLANNING
"Insurance is not for the person who passes away, it for those who survive”, goes
a popular saying that explains the importance of Insurance Planning.
It is extremely important that every person, especially the breadwinner, covers the risks
to his life, so that his family's quality of life does not undergo any drastic change in case
of an unfortunate eventuality.
It is extremely important that every person, especially the breadwinner, covers the risks
to his life, so that his family's quality of life does not undergo any drastic change in case
of an unfortunate eventuality.
Insurance Planning is concerned with ensuring adequate coverage against insurable

risks. Calculating the right level of risk cover is a specialised activity, requiring
considerable expertise. Proper Insurance Planning can help a person look at the
possibility of getting a wider coverage for the same amount of premium or the same
level of coverage for the same amount of premium or the same level of coverage for a
reduced premium. Hence, there is a need for proper insurance planning.
Insurance, simply put, is the cover for the risks that we run during our lives. Insurance
enables us to live our lives to the fullest, without worrying about the financial impact of
events that could hamper it. In other words, insurance protects us from the
contingencies that could affect us.
So what are the risks that we run? To name a few - the risk on our lives that is, the
worries of replacement of the incomes that we contribute to the running of the
household), the risks of medical contingencies (since they have the capability of
depleting our wealth considerably) and risks to assets (since the replacement of these
can have tremendous financial implications). If we can imagine a situation where our

goals are disturbed by acts beyond our control, we can realize the relevance of
insurance in our lives.
Insurance Planning takes into account the risks that surround a person and then
provides an adequate coverage against those risks. There is no risk not worth insuring
his/herself against, and insurance should first and foremost be looked as a measure to
guard against risks - the risk of his/her dreams going awry due to events beyond his/her
control.

RETIREMENT PLANNING
Retirement planning is the important task of deciding how a person will live once he/she
retires. Retirement planning involves the consideration of a number of factors, including
at what age a person hope to retire, how much money a person will need to cover living
expenses coupled with the things a person plan to do once a person retired, and where
his/her money will come from. Generally speaking, retirement planning is planning
his/her finances for the period of life after a person stop working.
Each person's situation is unique, and therefore, retirement planning isn't one standard
plan for every person. Saving money for retirement through one or all of the available
retirement planning options is the first place to start. Many employers have retirement
planning options available to their employees. Some companies have pension plans,
Even without company sponsored plans, retirement planning is possible for any
individual who wisely invests his or her money. A person can choose to talk to
a financial planner, but usually for a fee. Another option is to discuss investment and
savings options with the bank where a person currently have his/her checking
or savings account. Many banks offer free advice to their account holders hoping to gain
more of their business through long-term savings.
Retirement planning involves more than just saving money. It's important to determine
as closely as possible what his/her potential expenses and compare them to his/her
potential income. For instance, if a person will be able to pay his/her mortgage off
before retiring, that is one less expense a person will need to cover. It may be
necessary to find a way to pay an extra small amount towards his/her mortgage while
working in order to have that debt absolved before retirement, thereby lowering the
amount of money a person will need each month.
Depending on what age a person hope to be when a person retire, retirement planning
should also involve tax planning. By doing a little research and talking to financial
professionals, a person should be able to come up with a savings and investment plan

that works for a person. A person can begin retirement planning at any stage in life,
though earlier is better. Be prepared to make changes in his/her plan as his/her life
changes, and when a person finally reach retirement, the retirement planning a person
done will leave a person better prepared to relax knowing his/her finances are taken
care of.

ASSET PROTECTION
Asset protection is a way of protecting an individual‘s assets in the event of legal

proceedings being brought against the individual. There are a number of reasons why a
person may wish to do this. A main factor is to limit the amount of assets that can be
recovered if legal proceedings are put in place. Another is to protect how much
monetary value is actually placed under one's name. The less money or assets people
know a person have, the less likely they are to target a person for theft or in a court
case.
The act of placing his/her assets into a business entity or trust means that another
person cannot gain access to these assets. The assets also cannot be identified as
his/hers by criminals who, on seeing his/her worth, may try to use identity theft to gain
access to his/her assets. Anyone who has a substantial amount of wealth can find asset
protection advantageous. It is particularly helpful to people who work in professions with
a propensity towards litigation. Lawyers, doctors and business owners are at higher risk
from lawsuits, and asset protection can be a help in the worst eventuality.
Asset protection does not mean that the person is trying to get out of paying if he or she
is liable. Those with asset protection are simply making it more difficult for people to
target them as easy paa personts, which they may perceive them as if they had
knowledge of their wealth. The amount of litigation and lawsuits, combined with the size
of awards won in these cases, makes asset protection a very important financial option
to consider.
There are a many different ways that a person can set in motion the process of asset
protection. A person can place stocks, share and cash into offshore bank accounts. A
person can invest his/her money in living trusts or partnerships and companies. The
safest forms of asset protection investment are tested ones, which have successfully
protected assets from litigation in previous court cases. Use these methods of

protection as an example of how a person should invest his/her assets and a person
should not get caught out in any eventuality

TAX PLANNING
Tax planning is a broad term that is used to describe the processes utilized by
individuals and businesses to pay the taxes due to local, state, and Central tax
agencies. The process includes such elements as managing tax implications,
understanding what type of expenses are tax deductible under current regulations, and
in general planning for taxes in a manner that ensures the amount of tax due will be
paid in a timely manner.
One of the main focuses of tax planning is to apply current tax laws to the revenue that
is received during a given tax period. The revenue may come from any revenue
producing mechanism that is currently in operation for the entity concerned. For
individuals, this can mean income sources such as interest accrued on bank accounts,
salaries, wages and tips, bonuses, investment profits, and other sources of income as
currently defined by law. Businesses will consider revenue generated from sales to
customers, stock and bond issues, interest bearing bank accounts, and any other
income source that is currently considered taxable by the appropriate tax agencies.
In many cases, a primary goal of tax planning is to apply current laws in a manner that
allows the individual or business to reduce the amount of taxable income for the period.
Thus, planning for taxes involves knowing which types of income currently qualify for as
exempt from taxation. The process also involves understanding what types of expenses
may be legitimately considered as deductions, and what circumstances have to exist in
order for the deduction to be claimed on the tax return.
There are three common approaches to tax planning for the purpose of minimizing the
tax burden. The first is to reduce the adjusted gross income for the tax period. This is
where understanding current tax laws as they relate to allowances and exemptions
come into play.

A second approach to tax planning is to increase the amount of tax deductions. Again,
this means knowing current laws and applying them when appropriate to all usual and
normal expenses associated with the household or the business. Since these can
change from one annual period to the next, it is always a good idea to check current
regulations.
One final approach that may be applicable to effective tax planning has to do with the
use of tax credits. This can include credits that relate to retirement savings plans,
college expenses, adopting children, and several other credits. One common example
of a tax credit is the Earned Income Credit, which is intended to relieve the tax burden
for persons who earn less than a certain amount within a given calendar year.

ESTATE PLANNING
Whether or not it's something we want to think about, it's important to set our affairs in
order so our loved ones won't be burdened with too many details in the event of our
passing. Estate planning is important because it ensures our assets will be transferred
smoothly and effortlessly when we're longer here to oversee them.
Estate planning includes, among other things, writing out one's Last Will and Testament,
naming a Power of Attorney and installing trusts. Estate planning isn't only for the
wealthy, either. Anyone with assets would be wise to look into it. If a person have a
home, a car, a retirement fund, stocks, bonds, or any other investments, it would be in
the best interests of his/her family for a person to meet with an estate planning
professional.
The benefits of estate planning are many. The first and most important is that a person
get to designate where, or to whom, his/her assets will go. To not do so means his/her
relatives may end up fighting over everything in court. Thanks to estate planning, his/her
family will have minimal court and attorney fees regarding the distribution of his/her
property. If a person prefers his/her estate be left to charity, this, too, can be handled
through estate planning.
With careful estate planning, a person will be able to take care of his/her family after a
person gone. His/her final expenses and lack of income can put a serious dent in the
family's finances. It's best to plan accordingly to avoid putting his/her family in a position
where they will run out of money.
Estate planning will allow his/her money to flourish after a person is gone. A person will
be able to set up accounts and trusts for children and grandchildren which allow money
to grow. A person will be able to specify at what age the children will be allowed access
to these funds. If a person afraid someone will be irresponsible with his inheritance, this
may be a good idea.

A person will also be able to name guardians to his/her underage children so they're not
dragged around through the courts or social service system in the event of his/her
untimely death. Estate planning will also help in the event that a person become
physically or mentally impaired. It will ensure that the cost of his/her care will be covered
and a person will be given the best care a person can afford.
His/her passing will be hard enough on his/her family. With estate planning a person
can be sure his/her affairs are in order. This will ease some of the burden after a person
gone. His/her family will thank a person for it.

FUNCTIONAL AREAS OF WEALTH MANAGEMENT
Financial Planning
Portfolio Strategy Definition/ Asset Allocation/ Strategy Implementation
Portfolio Management - Administration, Performance Evaluation and Analytics
Strategy Review and Modification
Financial Planning
Client profiling takes in account multitude of behavioral, demographic and investment

characteristics of a client that would determine each client's wealth management
requirements. Some of key characteristics to be evaluated for defining client's
investment objective are:
 Current and future Income level

 Family and life events
 Risk appetite / tolerance
 Taxability status
 Investment horizon
 Asset Preference /restriction
 Cash flow expectations
 Religious belief (non investment in sin sector like - alcohol, tobacco, gambling firms,
or compliant with Sharia laws)
 Behavioral History (Pattern of past investment decisions)
 Level of client's engagement in investment management (active / passive)
 Present investment holding and asset mix
Based on the client profile, investment expectations and financial goals of the client
could be clearly outlined. Defining investment objectives helps to identify investment
options to be considered for evaluation. Investment objective for most of the investors
could be generally considered amongst the following:

 Current Income
 Growth (Capital Appreciation)
 Tax Efficiency (Tax Harvesting)
 Capital Preservation (often preferred by elderly people to make sure they don't
outlive their money.)
Portfolio Strategy Definition / Asset Allocation
After establishing investment objectives, a broad framework for harnessing possible

investment opportunities is formulated. This framework would factor for risk-return
trade-off of considered options, investment horizon and provide a clear blueprint for
investment direction.
Investment strategy helps in forming broad level envisioning of asset class (Securities,
Forex, Commodity, Real State, Reference and Indices, Art/Antique and Lifestyle Assets
(Car, Boat, Aircraft)), market, geography, sector and industry. Each of these asset
classes is to be comprehensively evaluated for inclusion in portfolio model, in view of
defined investment objectives.
While defining the strategy, consideration of client preference or avoidance for specific
asset class, risk tolerance, religious beliefs is the key element, which would come into
picture. Thus, for a client with a belief of avoidance of investment in sin industries
(alcohol, tobacco, gambling etc.) is to be duly taken care of. Likewise, for a client
looking for Sharia- compliant investment, strategy formulation should consider
investment options meeting with the client expectations.
Determination of Portfolio Constituents and Allocation of Assets
Guided with the investment strategy, constituents in portfolio model are determined,
which would directly and efficiently contribute towards client's investment objectives.

Thus, a broad level investment guidance of - "investment in fixed income in emerging
market" would further determine classification within Fixed Income such as Govt. or
corporate bonds, fixed or variable rate bonds, Long or short maturity bonds, Deep
discounted or Par bonds, Asset backed or other debt variants.
Return profile, risk sensitivity and co-relation of constituents within portfolio model would
help to determine the size (weightage) of each individual constituent in the portfolio.
Strategy Implementation
Having decided the portfolio constituents and its composition, transactions to acquire
specific instruments and identified asset class is initiated. As acquisition cost would be
having bearing on overall performance of the portfolio, many times process of asset
acquisition may be spread over a period of time to take care of market movement and
acquire the asset at favorable price range.

ASSET CLASS
An asset class is a set of securities that show similar characteristics and behavior in the
market. The group of securities in an asset class is also governed by the same rules
and regulations.
Asset classes can be broadly classified into two types, namely defensive and growth
oriented. The first category comprises assets that generate safe and consistent returns.
The assets in the defensive asset class are suitable for investors who are not willing to
take high risks. Growth oriented asset classes match the profile of long-term investors
who do not fear risks. Their aim is to generate higher returns.
Types of Asset Classes
Asset classes are of the following types:
1. Shares
2. Property
3. Cash
4. Fixed Interest Securities
Shares: A share, also called equity, is a stake or a unit of ownership that an investor
can buy in a company. Usually, the returns yielded by shares are much higher than that
of other asset classes. Investment in shares is quite flexible as they can be traded
easily. However, the investment in shares is risky due to price fluctuations. Investing in
shares is suitable for long-term investors who are willing to take risks.
Property: Investing in immovable property in the form of a residential or commercial

building or land is suitable for long term investors. Investing can take place by
purchasing the property directly or by investing in a property trust fund. Property
investment is not usually flexible as it requires sufficient time to buy or sell property.

Cash: This type of asset class includes everyday bank transactions and short-term
investments in the money market. Cash investments reduce the overall risk in an
investment portfolio as investors can easily access their capital. However, the rate of
return in cash investments is the lowest. There is very limited scope for capital growth.
Fixed interest assets: These assets yield fixed rates of return until the expiry of the
maturity period. Examples are bonds and certificate of deposits (CDs). The level of risk
associated with fixed interest assets is low. So, the rate of return of these assets is
usually lower than that of shares and real estate. An added benefit is that fixed interest
investments can be converted to cash whenever required. This asset class is usually
preferred by those who have low risk appetite.

WEALTH MANAGEMENT PROCESS
Wealth Management involves preparation of financial plan that help client to achieve
their goals and objectives. Financial Planning is a process. If the process is strictly
followed, the chances of meeting your objectives and achieving Financial Independence
will be considerably improved.
Stage 1: Identify Goals and Objectives

Stage 2: Collect Data
Stage 3: Analyze Information
Stage 4: Produce Plan
Stage 5: Implement Plan
Stage 6: Review of Plan & Objectives
Stage 1: Identify Goals and Objectives
The starting point is to identify Client goals and objectives. This step is done by asking
the soft questions which really get client thinking about where he/she what to be
financially. A Wealth Manager or Financial Planner discuss with them what aspirations
and intentions they have, what concerns they have and how important each of these
are. Furthermore, A Wealth Manager or Financial Planner discuss their attitude to
investment and other risks which is especially important, as it will be critical to
investment portfolio construction, a key aspect of your Personal Financial Plan. Finally,
it is crucial to understand how each of these issues makes them feel, so that a wealth
Manager or Financial Planner can help them to prioritise their objective. Financial
planning is not about selling products. It is about developing a financial game plan.

6. Review of 1. Identify Goals
Plan & objective and objectives
WEALTH
MANAGEMENT
5. Implement 2. Collect data
Plan PROCESS
4. Produce Plan 3. Analyse

Information
Stage 2: Collect Data
Next, wealth manager or financial planner needs to collect factual information. It is

crucial to understand client‘s personal circumstances, current financial situation and
how you have arrived there. The more detail the better, because the clearer this picture
of client and their finances is, the clearer the starting point of our journey. The best
advice cannot be given in isolation. Wealth manager or financial planner does this by
completing our Financial Review document. Wealth manager or financial planner will
consider their family, income and expenditure, employment status, tax position and

existing financial products so that wealth manager or financial planner can appraise the
appropriateness of them in relation to their financial plan. It is important to work out
client‘s disposable income (net monthly income minus monthly expenditure).
Stage 3: Analyze Information
The third stage is to for us to analyze your current financial position, and to fully review
your existing Investment. Wealth manager or financial planner considers client‘s goals
and objectives identified in stage 1, to determine the 'gap' between the goal and the
reality. This 'Gap Analysis' will enable us to clearly understand the journey clinet will
need to travel in order to achieve his/her goals and wealth manager or financial planner
can present this in Investment Plan.
Stage 4: Produce Investment Plan
Stage four involves the creation of a roadmap or journey plan, which communicates the
most efficient route from A to B. This roadmap is client‘s Personal Financial Plan. It will
analyse clients financial arrangements and make recommendations as to how their
existing finances can be utilised. This will cover their assets, investments, liabilities and
income. The way in which client spends his/her money is also a vital aspect of the
analysis. Therefore, a review of client‘s expenditure, in both the short-term and over the
long-term will help to establish how robust the overall financial plan is. The plan will
identify the cost of achieving Clients objectives, financial independence and plan for any
disasters which may arise. Financial Plan can be multi-generational and can cover the
effective and efficient distribution of assets on death, in accordance with goals and
objectives of clients
Stage 5: Implement Plan
The fifth stage of the process is to implement the plan. This stage includes an action
plan which will be provided once wealth manager or financial planner and client have
both agreed the plan. It could include amalgamating some or all of Clients existing
investments, cancelling unsuitable investments and would list all recommendations.
Without the implementation stage, the rest of the planning process can be worthless.
Stage 6: Review of Plan & Objectives
The final stage is to regularly review the plan and make modifications where required.
Reviews normally occur on an annual basis. The overall aim of the financial planning
process is to help client reach his/her financial goals and develop or maintain his/her
desired lifestyle, in the most efficient way possible. Financial planning gives
consideration to strategies for the creation, distribution or protection of wealth
specifically to meet your financial objectives.

KEY ELEMENTS OF WEALTH MANAGEMENT
Wealth management services involve fiduciary responsibilities in providing

professional investment advice and investment management services to a client.
Depending on the mandate of the services given to the Wealth Manager, Wealth
management services could be packaged at various levels:
A. ADVISORY
Wealth manger's 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.
B. 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.
C. CUSTODY, SAFEKEEPING AND ASSET SERVICING
Client is responsible for investment planning, decision and execution. Wealth

manager is entrusted with management, administration and oversight of
investment process.
D. END-TO-END INVESTMENT LIFECYCLE MANAGEMENT
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.

Wealth Management Firms In India
The details of five wealth management service providing company are as follow:
KOTAK SECURITIES
Kotak Mahindra Bank 'Kotak' has one of the largest, oldest and the most respected
Wealth Management teams in India providing solutions to the High Net Worth
Individuals. With our existence of over eleven years and the widest range of wealth
management solutions, Kotak has emerged the largest player by a wide margin. The
client base ranges from entrepreneurs to business families, as well as employed
professionals. Kotak provide financial advice and manage wealth for 30% of India's top
300 families
Products
Direct Equity: Direct Equity investment generally refers to the buying and holding of
shares of stock on a stock market by individuals in anticipation of income from dividends
and capital gains as the value of the stock rises.
Mutual Funds: A Mutual Fund is a professionally managed pool of money from

investors with similar investment objectives. Mutual funds offer diversification and
professional management of money. Diversification reduces the risk because all stocks
may not move in the same direction in the same proportion at the same time.
Insurance: Insurance needs are dependent on responsibilities and financial

commitments, which are defined by life stage and needs.
Structured Products: A structured product is generally a pre-packaged investment

strategy which is based on derivatives, such as a single security, a basket of securities,
options, indices, commodities, debt issuances and foreign currencies. A feature of some
structured products is a "principal protection" function which offers protection of principal
if held to maturity.

Private Equity: Private equities are equity securities of unlisted companies. They are
generally illiquid and thought of as a long-term investment. Private equity investments
are not subject to the same high level of government regulation as stock offerings to the
general public. Private equity is also far less liquid than publicly traded stock.
Real Estate: Real estate funds are founded by a group of real estate
professionals/experts to 'manage' property/real estate for the investor. Apart from sale
of property, real estate funds also make money from rentals on property owned by
them. Some real estate funds may not actually own property as that may involve above-
average risk from volatility in property prices.
Estate Planning: Estate planning is a process involving the counsel of professional

advisors who are familiar with goals and concerns, assets and how they are owned, and
family structure. It can involve the services of a variety of professionals, including
lawyer, accountant, financial planner, life insurance advisor, banker and broker.
Estate planning covers the transfer of property and may or may not involve tax planning.
Commodities*: Commodity trading provides an ideal asset allocation; also helps hedge
against inflation and buy a piece of global demand growth. Investors must understand
the demand cycle that commodities go through and should have a view on what factors
may affect this. Because commodities prices usually rise when inflation is accelerating,
they offer protection from the effects of inflation. Few assets benefit from rising inflation,
particularly unexpected inflation, but commodities usually do.
Art*: As with any investment, need to do research and go beyond comfort zone. The
art market is fickle and there are no guarantees of profitability, but with a little legwork
and forethought one can fill home with images that may prove worthy investments down
the line. The price of art is affected by such an array of intangible factors that valuing it
can never be an exact science.

PMS and NDPMS: Investing in equities requires time, knowledge and constant
monitoring of the market. For those who need an expert to help manage their
investments, Discretionary Portfolio Management Service (PMS) comes as an answer.
Asset Allocation Model
 Seeks to estimate future market movement

 Tracks various parameters to be used as lead indicators
E.g. factors denoting liquidity, economic growth, volatility, risk spread etc
 Also accounts for qualitative macroeconomic factors
 Quantitative model‘s outputs ratified by highly qualified Investment Committee
 Takes into account unforeseen non-quantifiable events
 Combination of parameters indicate future course of capital markets
 Combination of high liquidity, high volatility, high risk spread, etc could
denote imminent fall in markets
 Combination of low risk spread, low equity risk premium, etc could denote
imminent upswing in the markets
 Proprietary Lead Indicator Model
 Indicates phase in the economic cycle through Overweight, Neutral, and
Underweight Bands
 Call to be taken as per the phase in economic cycle indicated
Investment Philosophy
The mission is to provide clients with wealth management services that result in a
performance that meets or exceeds their investment goals. Exposing clients to undue
risk is contrary to this mission. They believe that the tools of Modern Portfolio Theory
empower with a methodology for building superior investment portfolios. This has been
tested in all types of market conditions for decades and has consistently protected
investor wealth from the perils of non-diversification.

ICICI BANK
Investment process starts with understanding of background, investment objectives, risk

tolerance and existing investment pattern. A comprehensive risk-profiling exercise helps
in evaluating risk appetite and understanding investment objectives, which are kept in
mind while building portfolio.
Investment Planning
Based on investment goal, wealth requirements, investment horizon and risk profile,
they construct a suitable asset allocation plan. During this exercise, they also evaluate
and realign existing investments as per the suggested asset allocation.
Portfolio Construction
From wide range of investment avenues, icici construct appropriate solutions to
implement investment plan and evolve a tailor-made portfolio for specific requirements.
This would involve execution of investments in debt, equity, structured products or
alternative asset classes as per the suggested asset allocation.
Portfolio Maintenance
Company monitors investments and periodically suggest rebalancing in the portfolio for
maintaining the asset allocation or aligning portfolio to changes in macro-economic
factors that might affect investments.
Portfolio Review
As investment preferences or financial goals change over a period of time, they review
portfolio periodically with to discuss and implement any changes in asset allocation or
portfolio strategy. All with a view to keeping your portfolio healthy at all times.
Products and Services

1. icicidirect.com
With a 3-in-1 account consisting of a trading account, ICICI Bank savings account and
demat account, one can stay connected to the market at all times. With a 3-in-1 account
consisting of trading, ICICI Bank account and demat account:

 Competitive priced brokerage rates
 Reduced account opening charges
 Online share trading services
2. Mutual Funds
Bank offers advice on the entire universe of mutual funds. So be it equity funds, where
look for growth and capital appreciation or debt funds for capital preservation, they can
help select the right mix to suit. Choose from an array of more than 15 fund houses with
innumerable schemes.
3. Structured Products
Structured Product offerings are tailor-made to suit your investment objective and risk
appetite. These services include Portfolio Management Services and specially designed
products that are Equity or Index-linked in nature.
4. Alternate Asset Products

These offer products which complement your existing investments eg. Art Funds,
Private Equity Funding, Realty Funds.
5. Life Insurance & Retirement Solutions

With assistance one can choose a plan customized to his benefit.
6. General Insurance
They offer products in areas of Health Insurance, Home Insurance, Travel Insurance
and Motor Insurance.
7. Fixed Deposits
Choose from wide variety of Fixed Deposits. Be it that Recurring Deposit for monthly
savings plan, or Floating rate Deposits to take advantage of dynamic interest rates.

RELIGARE WEALTH MANAGEMENT
In the continuous endeavor to provide the best of the product and services to the
clients, The Religare and Macquarie are now 50:50 Joint venture partners in the newly
created entity Religare Macquarie Wealth Management Limited.
The new entity is testimony to Religare's firm commitment to all its businesses wherein,
it believes in offering nothing short of the very best to its clients and the end consumers.
In order to do so, it believes in creating and delivering value by either going solo or by
leveraging relevant and meaningful partnerships with global majors and domain
specialists. They believe that this joint venture with Macquarie is a marriage of strengths
that combines the sharp understanding, insights and execution capabilities of Religare
in the Indian context with the global expertise of Macquarie.
The new brand for the venture-Religare Macquarie Private Wealth shall strive to
proactively manage their Wealth and is hungry and keen to bring about a much needed
refreshingly different paradigm shift in the Indian market place. Religare Macquarie
Private Wealth shall draw strength and its core essence from the values of Religare's
"Diligence" and Macquarie's "Forward Thinking".
Products
1. Panther
The Panther portfolio aims to achieve higher returns by taking aggressive positions
across sectors and market capitalizations. It is suitable for the "High Risk High Return"
investor with a strategy to invest across sectors and take advantage of various market
conditions.
2. Tortoise
The Tortoise portfolio aims to achieve growth in the portfolio value over a period of time
by way of careful and judicious investment in fundamentally sound companies having
good prospects. The scheme is suitable for the "Medium Risk Medium Return" investor
with a strategy to invest in companies which have consistency in earnings, growth and
financial performance.
3. Elephant
The Elephant portfolio aims to generate steady returns over a longer period by investing
in Securities selected only from BSE 100 and NSE 100 index. This plan is suitable for
the "Low Risk Low Return" investor with a strategy to invest in blue chip companies, as
these companies have steady performance and reduce liquidity risk in the market.
4. Caterpillar
The Caterpillar portfolio aims to achieve capital appreciation over a long period of time
by investing in a diversified portfolio. This scheme is suitable for investors with a high
risk appetite. The investment strategy would be to invest in scrips which are poised to
get a re-rating either because of change in business, potential fancy for a particular
sector in the coming years/months, business diversification leading to a better operating
performance, stocks in their early stages of an upturn or for those which are in sectors
currently ignored by the market.
5. Leo
Leo is aimed at retail customers and structured to provide medium to long-term capital
appreciation by investing in stocks across the market capitalization range. Its aim is to
have a balanced portfolio comprising selected investments from both Tortoise and
Panther. Exposure to Derivatives is taken within permissible regulatory limits.
Asset Classes Used

1. Equities (Including International)
2. Debts
3. Commodities
5. Emerging Investment Classes
6. Religare Arts Initiative (RAI)

STANDARD CHARTERED
Priority Banking - personalized Wealth management program at Standard Chartered
Bank. It is their endeavor to be the Right Partner in all their personal and business
ventures. That's why Priority Banking has been tailored to offer you the highest level of
service, appropriate to unique requirements and status.
Products
1. Excel Banking
In today's fast moving, technology-driven world, you need bank to keep pace with
banking needs. That's why you need Excel Banking - a much personalised Wealth
management service that has been designed to help make the most of money, without
taking up most of time.
With the services of their personal Relationship Manager customer can access
complete Wealth management solutions, from routine banking and transaction
management to more complex investment services and insurance advisory services.
What's more, you also get fee waivers on premium savings and current accounts and
preferred pricing on a range of complementary banking products and services.
2. Parivaar Account
Parivaar is a unique Wealth Management Solution from Standard Chartered Bank that
offers family flexibility, convenience and essential tools for Wealth accumulation and
preservation. Parivaar is much more than a regular Savings Account. It allows you
maintain individual identity while allowing you to tap family's financial strength.
Asset Classes Used

1. Equities
2. Debts
3. Mutual funds
4. Commodities

They have developed a different and more focused approach to wealth management.
Understanding that wealth means different things to different people, they believe that
no one is better placed to help acquire wealth and grow it, use and enjoy it, protect it
and pass it on.
The investment philosophy uses sophisticated profiling and portfolio construction
techniques to aim for investments that deliver market-leading performance in the way
you want, because while performance is key, it is performance that suits that really
matters.

HSBC FINANCIAL PLANNING SERVICES
The portfolio can be managed in a fully discretionary manner from a selection of 'Best of
Breed' third party panel of Portfolio Management Service providers.
The main objective is to help to preserve wealth in line with investment objectives.
Inflation, falling interest rates and fluctuating market conditions require planning
finances carefully. Celebrate important occasions in the future by managing Wealth Well
now. HSBC's Financial Planning Services offer assistance to secure future. Their
Financial Planning Services are available for existing HSBC customers and are free of
cost.
Products
1. Signature Portfolio
2. Strategic Portfolio
Asset Classes Used

1. Direct Equity Advisory
2. Mutual Funds
4. Real Estate Venture Funds
1. Need-based sales approach with innovation
The team works to suggest financial solutions based on risk appetite, profile and needs.
Using customer insight, they have developed a financial planning tool. It analyses and
generates a comprehensive financial plan based on existing financial position, expected
future cash flows, inflation and identified financial objectives. The Relationship
Managers extensively use this tool to do financial planning for you taking into account
long-term objectives and/or medium to short term requirements.

2. Technology is a potent weapon
For consistency in the manner in which our Relationship Managers identify customer
needs and suggest suitable solutions, we extensively leverage technology to support
our sales process. Our indigenously developed systems like Wealth Management
System, Financial Planning System and Customer Relationship Management System
have been built basis customer insights.
3. Sharing the knowledge

They frequently organize wealth management events and investment seminars, where
one can interact with investment experts and fund managers. This provides a platform
to know and understand the market and economic developments and trends.

CONSUMER SURVEY OF WEALTH MANGEMENT
SERVICES
Our main objective of the project is to study the opportunities and challenges of wealth
management sector. Without consumer survey, we cannot able to find out opportunities
available in the market. With help of consumer survey, we able to know various basic
questions related to expectation of consumer and their requirement. Consumer survey
helps us to find out in which services there will be demand.
We have taken sample size of 50 people which include Doctors, Professor, Government
employees and businessman, who have enough wealth but don‘t have knowledge of
how to manage it. So they are become potential customer of wealth management
services.

1. Which age group do you belong to?
The need of investment is very from every age group. We also see that the amount they
can invest is also differing. We can understand that at the age group of 45 to 55 years
has substantial amount of fund which they want to invest.

2. What is your annual income?
In survey we find that more than 50% people have income bracket of rupees 3 lakhs to
7 lakhs. On the basis of the sources of income like Business, Profession and Salary
employee the annual income is differ. So amount for investment purpose is directly
related with that.

3. Are you aware about the "Wealth Management Services"?
We find that 54% people know about the wealth management services. This is on the
basis of people exposure toward investment purpose. If they invest in stock market than
they knowledge these services.

4. Which kind of services do you use or will use in Wealth Management
Services?
There is more than one services used respondent. Generally people less invest in real
estate area because it requires higher amount investment. The insurance, retirement
and tax planning have around same kind of service preference by respondent.

5. What is your primary investment objective?
The objective for investment is to earn regular income and risk associated with it. There
is also more than one preferences for people to invest. This is important for duration of
investment and earning requirement of people.

6. Which asset category will you prefer to allocate your money?
In survey we find that major part of allocation of money is toward fixed income
investment because people are risk averse and long term return requirement.

7. Do you take advice from any financial adviser before investing?
Most of people believe that they should take advice from financial adviser but they
actually not taking any service because the charges and the confidentially of
information. People have hesitation to give financial detail to adviser.

8. Do you believe that the systematic saving is easier and an
efficient way of saving?
Systematic saving gives the return according to future requirement and risk taking ability
so the efficient wealth management is possible and most of respondent agree with but
in reality they think that are smart enough to manage their wealth.

CONSUMER SERVICE ANALYSIS
In the primary data analysis, we see that potential client from the various business
classes. We surveyed doctors, professors, government employees and business
people. At the age group of 35 to 45 years people have more income and they have
more investment need. The upper middle and middle class respondent have average
income of Rs. 3 Lakhs to 7 Lakhs yearly. The family size and structure is also included
in survey so that ability for investment and future expectation from investment can
predicted.
From consumer survey, we are able to know primary objectives of potential clients.
Respondents are from different group, each group reflects different types of their
primary objectives. Government employees prefer to earn more regular income, where
as doctors prefers to earn supplement income and professor want to earn inflation
adjusted return from their investment.
The respondent use different type services as per matching with primary objective of
investment. In the early professional life stage respondent make high proportion of
investment in equity and risky assets. We analyze that as age and income grow them
moving to tax planning and pension planning services.
In the research we also see that the government employee make more investment in fix
income and government schemes because they are more concern about the pension
planning. To maintain level of wealth in longer run so they have to match their needs
with inflation rate and interest rate. The investment in gold and other precious metal is
best investment for inflation adjusted income.
In the conclusion, the consumer awareness is very less toward the wealth management
services. There is lot of expectation from the wealth manager so it requires trust and
understanding of both the parties. The respondents believe that effective return can be
achieved through systematic investment so they unknowingly use these services in
single form rather whole bunch of wealth management.

WEALTH MANAGER SURVEY
In our project, our objective is to find out opportunities and challenges of wealth
management sector. For that purpose, we need to understand how whole wealth
management process is carried out, what are various challenges faced by them in
providing services.
Wealth manager survey conducted by us is with a limited number of Wealth managers,

but it is of wide variance, as we have done Wealth managers survey in different types of
organization in Wealth management sector
We have selected wealth manager of Standard Charted Wealth Management Services,

Angle Broking (Wealth Management Division) and Fullerton Securities and Wealth
advisory ltd for wealth manager survey.

ANALYSIS OF WEALTH MANAGER SURVEY
On basis of Wealth manager Survey we able to analyze following things
 Consumers have very little awareness about wealth management sector and
services. They understood wealth management and portfolio services management
are same.
 The objective of client for taking wealth management services are Maximise return
with lower risk, reorganization investment decision and one stop destination for
investment.
 Consumer are more concerned with risk and return from wealth management
process
 Consumer ask question related to how their wealth will be manage?, what are risk –
return ratio?, who will manage my wealth ?
 Wealth management service use by various profession person like doctors,

professors, Small Businessman
 Average size of wealth manage is around Rs 5 lakhs
 Wealth manager see very huge potential market in middle income group which have
monthly income of 30k to 50k
 Wealth Manager face challenges in area of trust building, awareness, competition,

client requirement

EXPECTATION OF WEALTH MANAGER FROM CLIENT
Wealth Manager Expect various information and support from client so that they can
make efficient and effective financial planning which help client‘s to achieve their goals
and objectives. Wealth Manager expect following things:
 Client will be open, frank and honest with us at all times.

 Client will tell Wealth Manager as early as possible of any concerns they have about
their work together.
 Client will give necessary information to wealth manager need to work on their
financial plan, within the timescales
 Client will make time available to play their part in the delivery of financial plan so
that there will be effective execution of plan
 Client will communicate any change in their objective or income level so that wealth
manager can adjust their financial plan according to that.

PURPOSE OF WEALTH MANAGERS
Wealth Manager serves various purposes in financial planning which are as follows:
 To generate returns in such a manner that would address long terms and short term
objectives of the client/ customer
 To manage customer‘s wealth by striking a balance between safety and growth of
the investments
 Commitment to rational approach to investing with strong emphasis on ethics and
values
 Strong belief in achieving excellence in their processes and also their knowledge
base and skills
 Adherence to long term conservative approach by avoiding speculation
 They try to be the best in the domain of Investment Advisory
 Shared values of the team are dignity, respect and fairness for everyone
Role of the Wealth Manager
During financial Planning, a wealth manager or financial planner plays various roles, so
that this process complete with minimal fault. Financial planner or wealth manager need
 To Review clients current circumstances.
 To Listen clearly to what they say.
 To Understand their goals, requirements and concerns.
 To Provide Education regarding investments
 To Develop the right strategy to move forwards.
 To Analyse Risk and then develop an appropriate investment strategy
 To Be Mindful of any shortfalls and to make client aware of them.
 To Minimise taxation implications or any consequences of tax changes.
 To Implement the proposed financial plan
 To Monitor progress towards objectives.
 To Communicate on a regular basis.

WEALTH MANAGEMENT PRACTICE ORIENTATION
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 client's finances and
short/long-term goals, such as real estate, retirement and generational wealth
transfer.
• Personal CFO: Aspires to provide quasi family-office services, often acting in a
lead discretionary role coordinating with the client's other trusted advisors.

HOW WEALTH MANAGEMENT FIRM OPERATE IN INDIA?
In India, Wealth Management firm operate as different way. There are Many Private
Banks, Financial Institution, NBFC and Local Advisory firms in Wealth Management
sector. Most of banks have opened a division called wealth management. Where as
some financial institution have open wealth management office in metro cities. Business
Model, Advisory Model and Operation Model of Wealth Management sector are as
follows
Business Model
 Firm moved from ‗boutique‘ model to selling a wider range of products from across
segments, helping to capture a larger client base and providing greater
diversification in the challenging business environment.
 Aims to achieve traction in client relationships and become a ‗one-stop shop‘ for all
client needs.
 Plans to grow through distribution so business can expand beyond metro areas.
 Operates like a global Private Bank, leveraging strength in cross-border accounting,
which is a weakness among regional/local firms.
Advisory Model
 Team-based model offering clients access to a wide range of experts.
Operating Model
 Seeks to capture economies of scale by leveraging existing capabilities, such as
using existing core banking systems for asset allocation, triggers, and so on.
 Middle and back-office optimization helps to drive profitability.

TOP 10 WEALTH MANAGEMENT MISTAKES
This is easily one of the most frequently asked questions by many – even those who are
already tied up with wealth management services. And, with the number of wealth
management service providers increasing by the day, the definition will tend to get more
diffused.
Wealth management does mean a lot many things to many people. For some it actually
amounts to managing the asset portfolio, which usually has three components, like real
estate, equity holdings and some insurance. And even in this, the real action is around
the equity portfolio – how much a person are earning, how his/her capital is growing,
and so on.
But the essence of wealth management, as most managers would tell a person, is
distinct from portfolio management. It is more long term and entwined with his/her life
rather intimately. It is the creation of wealth to meet individual goals and the goals of the
family. It even goes beyond his/her own life, it could even include his/her philanthropic
and other related aspirations of seeing that his/her wealth has grown and is well
distributed.
―Often in India, wealth management is seen as accumulation of money and not about
the ‗wealth‘ as such. More money does not mean more wealth,‖. And this is not an
India-specific phenomenon. India has the fastest growing number of millionaires in the
world and therefore the problem is rather prevalent here.
There are 10 big mistake happens at a time of Wealth Management. These 10 mistakes
are as follows:
1. Going it alone
2. The right partner
3. Clarity
4. Revisiting objectives
5. Greed and Panic

6. Communication Hassles
7. Protection
8. Neglecting Succession Planning
9. Involving Family
10. Overdependence
The detail regarding each mistake and how to solve that mistake are as follows.
1. Going it alone
And one of the biggest mistakes people make in this area of wealth management is to
do it alone. ―I think I can manage stuff on my own and after all I have the knowledge to
handle it,‖ is the usual response.
Professionals like lawyers, doctors and even trained financial professionals need
specialised wealth management support. And this is because it is not about placing
monies in pre-designed compartments – 10% in fixed income, 40% in real estate 40% in
equities and the rest in insurance. It is not a product of a software program, but a series
of iterations that result in asset allocation, which is designed to meet his/her life goals.
Professional wealth management service providers go a long way in understanding a

person and his/her needs, his/her lifestyle and his/her family. They then come up with
several plans that could enable a person to grow and distribute his/her wealth. It is
better to involve professionals here.
2. The right partner
By an extension of the previous mistake, often high net worth individuals tend to pick up
more than one service provider. In India, clients provide only a portion of their portfolio
to one wealth manager; hence the advice is suitable for only a part of the overall client
portfolio. This is in contrast to international practice where investors engage with one
wealth manager to provide holistic advice on their entire portfolio. It not only allows
disciplined approach to investments but also helps clients achieve their investment
objectives.‖

And when a person express his/her desire to chose a wealth management partner,
there will be many who will line up for what is known as the ‗beauty pageant‘ and will
present their abilities to manage his/her wealth. Here, it can be said that it is better to
avoid service providers who base their income on commissions from financial product
vendors. These are advisors who, often enough, would peddle products based on the
commissions that they receive and not the efficacy of the product itself and its match
with his/her life goals.
While most financial planners and wealth managers would be good and competent, one
can never be sure of their genuineness. Hence, doing a background check before
deciding on someone is a must, for there are still those unscrupulous advisors lurking
around, only waiting to catch their next prey.
Yes, the process of choosing a wealth manager should be even more carefully done,
then choosing someone to employ. Hence, references are more important here, and,
checking up with them equally so. It is, after all, his/her entire wealth and life a person
are going to be discussing with this person.
When a person goes to a wealth manager, note, most of them will have the gift of the
gab, but under no circumstances should that intimidate a person or make a person
passive. After all it is a service a person wish to buy, hence it is important to ask
questions, determine what their plan of action will be and how his/her money will be
invested. Prepare a list of questions a person would like answered, to put forth to
his/her wealth manager. Remember, being free and open about talking to his/her
manager, being able to disclose everything and, most importantly, having a comfort
level and rapport with him is a must.
3. Clarity
Lokesh Nathany, national head of wealth management, Almondz Global Securities feels
―One of the most important parts of wealth management is asset allocation. This is a
critical area where many people have made mistakes, by jumping around too much or

not changing at all.‖ And this happens because there is no clarity in why the wealth
manager was approached.
Wealth Manager often gets clients who have come to us because their friends told them
at a party that our firm had helped them get some quick returns.
Though not water-tight, a person have to have some clarity on the broad goals that a
person want to achieve in his/her life. These goals could be in the form of his/her
children‘s education, buying a farm house, children‘s marriage, retirement and even
beyond his/her demise.
4. Revisiting objectives
Obviously, as life goes on, objectives and goals keep changing. And when these
happen, the wealth manager or the relationship manager must be consulted to reset the
entire portfolio. And this is a critical aspect many clients tend to forget, says a wealth
manager. In case a person have a marriage plan changed to a closer date than planned
then a person would might have to liquidate a few assets that a person have kept for
that date. Now, which are the assets that a person would liquidate and how do a person
restructure the portfolio?
Such decisions must be taken after great thought, reckon experts. But revisiting
objectives just because market circumstances have changed and reshuffling the overall
asset allocation mix at regular intervals might not be the right thing to do. But if there are
compelling reasons, like the huge bull-run in the past three years (which is not exactly
short-term), revisiting objectives and a reshuffle might actually work.
As per one wealth manager, ―Asset allocation, however, should be reviewed periodically
and strictly. If it was decided his/her allocation would be 70% equity and 30% debt,
during an equity boom this may change to a 90-10 ratio.‖

5. Panic / greed
Wealth management is a long term process and there will be times, especially in the
bull-run, when a person would be tempted to risk more. These are the times when long
and detailed wealth management plans are often shelved, sometimes broken down to
indulge in speculation. ―One of my clients actually broke our relationship and placed all
his wealth on the markets, he even borrowed and took large positions. And when the
markets started to tank, he panicked. But then, around 30% of his wealth was washed
out in three months,‖ says a relationship manager not wanting to be named.
Its first greed and then panic, he adds. A person might want to keep some funds aside
for speculation, but do not interfere with his/her wealth management capital and his/her
life goals, unless any of them have changed.
6. Communication hassles
Wealth managers usually will keep sending a person a lot of mailers and documents to
keep a person abreast of his/her wealth position. Now, there could be an information
overkill situation. However, a person needs to be clear about where his/her funds is
being allocated and how are they being monitored. And this relationship should be
clarified at the very beginning of the association. Moreover, it is prudent to work with
those, who ensure maximum confidentiality and address his/her communication needs.
7. Protection
Often enough, wealth management is considered to be just about growing a set capital
and then deciding how to distribute these monies. Many times, the aspect of protecting
and covering assets and lives is not looked into. And many wealth managers, especially
those attached with broking firms, tend to overlook this factor as well, or would include
this in the investment basket, by using the unit linked route.
This is a grave mistake. A person needs to insist to his/her wealth manager to include
the insurance aspect as well. And it is most likely that his/her wealth manager will

actually provide a person with some sound advice here. ―The commissions from life
insurance are quite attractive,‖ says one of Wealth Manager
8. Neglecting succession/estate planning
There have been umpteen cases where the family members of the deceased have been
involved in bitter legal wrangles over sharing the estate. And most of this happens
because a proper legal will was not prepared. Planning the ‗will‘ much earlier will ease
much of the tension. His/her philanthropic activities can also be scheduled in the will.
Moreover, wealth managers now offer trust services where trusts can be created for
various purposes and their execution can be managed by the wealth managers. And
trusts can be created even when a person is alive and they will be managed according
to his/her wishes and direction.
9. Involving family
Though it comes at the bottom of the rankings, not involving his/her family in the wealth
management process could easily be one of the biggest mistakes. Experts recommend
that speaking and sharing his/her overall plans with his/her family.
Discussing the life goals helps as the clarity, understanding and alignment of all family
members is enhanced and therefore the wealth manager can then set up a solution that
best fits his/her requirements. And with the family members involved, the sense of
participation also increases, reckon wealth managers.
10. Overdependence
Lastly, wealth managers are human too and they make mistakes. Being completely
dependent on them could be as counter-productive as constantly prodding them with
suspicion. However, a healthy sense of accountability must be established where
performances are questioned and monitored.

Having looked at all these factors, wealth management can be a rewarding experience
that can help a person fulfill his/her dreams and aspirations. It can, as a wealth manager
says, enable a person to see the fruits of his/her labour and enterprise be translated into
happiness. It just requires some smart diligence.

WEALTH MANAGEMENT SECTOR ATTRACTIVENESS
To know the industry attractiveness, we use Porter Five Forces Model. This model
provides the industry analysis so we can understand which factor influence which part
of industry. As per porter five forces model, there are five forces that determine
industrial attractiveness, which are as follows:
1. Power of Service Provider
 Less knowledge of systematic wealth management, the clients follow only by

manager advice.
 Service providers have to provide customize product so it is challenge to
maintain relation with client in this case less power with service provider.
 The expert annalist requires making analyses but scarcity of professional,
charges make very high for services.
2. Power of Client
 There is number of players in the industry so client may switch over to other
service provider.

 The client try to make own investment decision so manager may not provide
efficient service to its client.
3. Threat of New Entry
 Banking companies started providing this service as value added service.

 Comparatively small stock broking firms enter in this business.
 International firms enter into Indian Wealth Management market.
4. Threat of Substitute services
 The portfolio Management Service provider which has only span of stock market.
 The single service provider like insurance service, tax planning service etc.
5. Rivalry among existed Competitors
 The service charges are very competitive so it effected to margin.

 Every player has to compete with different level of competitor like international
firm compete with small broking firm.
 The level of customization is change by every competitor.

Opportunities for Wealth Management Sector in India
India represents the greatest opportunities to Wealth Managers over the coming years.
Infect, in current financial environment, the wealthy population in India is large as well
as growing, yet an underdeveloped Wealth Management industry served the market.
 In the world, India has the tenth highest number of dollar millionaires and their rate
of growth is higher than in any other country
 In India, wealth management services are underdeveloped and there are urgent
opportunities for companies who understand the market to capture business there
 Financial sector reforms and a relaxed regulatory framework are allowing wealth
generation in India to become more competitive and open
 Wealth Management will need to adapt with clients, to spread beyond the largest
cities and educate its clients on the changing business environment
 To foreign banks, non-resident Indians represent a large asset
 Indian people are looking increasingly beyond their own borders for their
investments. Therefore, foreign banks must leverage their global expertise
―The 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,‖
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,.
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. There is an increasing momentum towards structure in this previously
chaotic domain. There should expect some very India specific innovations in the near

future. 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.
As per report of Celent, Wealth management revenues are expected to contribute 32-
37% of the total revenue of full-service financial institutions by 2012. 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 ‗own them young‘ policy.
The ultra-high net worth households with wealth in excess of Rs 120 Crores would have
a total population of 10,500 households by 2012, while the super high nets worth
households (Rs 40 crores -120 crores ) are expected to grow to 42,000. The population
of high net worth households (Rs 4 Crores – 40 Crores) would grow to 3,20,000, while
there would be 3,50,000 households in the super-affluent category (Rs50 Lacs - 4
Crores ). Besides, 10 lakh new households would join mass-affluent category (Rs10-50
lacs ), 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 lac).
Category Wealth Size No of Household

Ultra High Networth > Rs 120 Crores 10,500
Super High Networth Rs 40 Crores - 120 Crores 42,000
High Networth Rs 4 Crores - 40 crores 320,000
Super affluent Rs 50 Lacs - 4 Crores 350,000
Mass- Affluent Rs 10 Lacs - 50 Lacs 1,800,000
Mass Market Rs 2 Lacs - 10 Lacs 39,000,000

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.
India has the tenth highest number of dollar millionaires in the world and their rate of
growth is higher than in any other country. A relaxed regulatory framework and financial
sector reforms are gradually allowing wealth generation in India to become more open
and competitive. Wealth Management services in India are under-developed and there
are immediate opportunities for organizations who understand the market to capture
business there. Wealth Management will need to spread beyond the largest cities and
to adapt with and educate its clients on the changing business environment. Indians are
increasingly looking beyond their own borders for investments; foreign banks must
therefore leverage their global expertise.
India's potential for HNWI growth and expansion is also evident. The HNWI population
in India is also expected to be more than triple the size in 2018 that it was in 2008, with
emergent wealth playing a key role. Like China, relatively few among the current HNWI
population (13%, compared to 22% in Japan) have inherited their wealth and few (9%)
are over the age of 66, suggesting economic growth has the potential to boost the size
of the HNWI population. Wealth is also likely to extend beyond metropolitan areas. India
currently has a middle class of 80 million households and only 25 million reside in Tier I
cities like Mumbai and Delhi, while many others live in smaller cities and beyond. And
there are already 5 1 districts that have twice the market potential of the four metros
combined illustrating the potential for HNWI wealth to be even more geographically
dispersed in the future.
Firms in India also have an important and unique opportunity to serve the offshore
segment, as the remittances ceiling has been progressively raised over the last five
years: from US$25,000 in 2004 to US$200,000 per person in 2009. Moreover, the
Securities and Exchange Board of India (SEBI) recently eliminated the entry load for
mutual fund distributors, which is expected to encourage firms to adopt a more
advisory-based model with increased transparency.

Likewise, non-resident Indians (NRIs) represent a huge potential client segment for
wealth management firms: NRI deposits grew from US$36.1 billion in December 2008
to US$39.2 billion in May 2009, while remittances, estimated at US$49 billion in 2008
are projected to reach US$56 billion in 2013. By contrast, China's remittances were
US$37 billion in 2008 and are projected to be US$48 billion in 2013. This is particularly
significant given that 15%-25% of NRI portfolios are invested in India. Outside of Asia-
Pacific, the Middle East and North America are the regions with the highest NRI
population. Together, they submit close to 70% of NRI remittances coming from outside
of Asia-Pacific.
If we talking about opportunities in particular services, then there are opportunities

available in Investment Planning, Retirement Planning and Estate Planning.

KEY CHALLENGE AREAS
While immense business potentiality of this emerging sector is a driving point for most
of the firms, they face many challenges in formulating winning services offering meeting
the client needs. In the following section, we would briefly take a look on the key
challenges area in the present context.
1. Awareness About Wealth Management

Awareness is biggest challenge area for Wealth Management Sector. Most of the
people are not aware about wealth management sectors. In India people assume that
wealth management and portfolio management are same, and provide same service.
There is need for creation of awareness about wealth manage concept in India .
2. Highly Personalized and Customized Services

Unlike other stream of financial services, mostly being transactional /commoditized in
nature, wealth management services require client specific solution and service offering.
No one solution exactly meets the needs of other client. In a situation of highly
personalized and customized nature of service offering, developing any form of generic
service model does not support growth of the business.
3. More Focus on Return

One of major challenges is client‘s major focus on return. Clients are always asking
question related to return. They want return as per original financial planning. If there
any deviation from return then they need explanation and they change wealth manager.
4. Competition From Bank

Wealth Management sector faces very tough competition from Banks. Banks have huge
customer data and information about their cash balance and their investment pattern.
On basis of that, Banks have created Relationship division which nothing back door
entry of Banks in wealth management sector. Where as Wealth Manager face
competition for customer aquistion.

5. Tough Competition From Individual Service Provider
Wealth Management service is package of various services like Investment Planning,
Insurance Planning. Retirement Planning, Tax Planning etc. There are lots of stock
broking firm who provide Investment planning service. There are lots of individual
insurance agent and there are lots of CA who providing Tax Planning Facilities.
6. Personal relationship driving the business

To meet client expectation of personal attention, mode of communication in wealth
management services tends to be highly personalized. Thus, the conventional grids of
communication, such as call centre, data centre does not fit well. Success of wealth
management services heavily draws on personal interaction with the dedicated
relationship manager, who takes care of whole investment management lifecycle for
bunch of clients on one-to-one basis. This essentially requires service firm to invest
heavily in human processes to groom and retain a team on competent relationship
managers with cross functional skills.
7. Evolving Client Profile

The biggest challenge in providing wealth management service offering is to factor and
reckon the evolving nature of client profile, in terms of investment objective, time
horizon, risk appetite and so on. Thus, a service model developed for a particular client
cannot remain static over a period of time. Any service model has to be flexible enough
to consider the dynamic nature of client profile and expectations arising out of it.
8. Client Involvement Level

The conventional adage – the more money you have, more effort is needed to manage
it – proves to be otherwise in case of HNWIs. Generally, client involvement in managing
the finance remains on the lower side. This brings onus of managing the whole gamut of
investment and due performance single-handedly on the shoulders of investment
manager.

9. Limited Leveraging Capabilities of Technology (as an enabler)
In the recent times, we have witnessed technology a key enabler to help business to
expand its market reach with reduced cost of services offering. Online banking and
online trading/brokerage services are the best examples in this regard. Technology
leveraging has helped services firm to achieve universal proliferation of market with
substantially reducing transaction cost.
As business rules and service definitions to guide the applications tends to be quite
composite in wealth management services, leveraging the capabilities of technology to
meet the business requirement may not be highly feasible in the initial years.
10. Intricate Knowledge of Cross-functional Domain

By very nature of wealth management, it not just involves matters of plain vanilla
finance but has intricate relationship with many elements of domestic / international law,
taxation and regulatory norms. In order to provide sound investment guidance, a
relationship manager is required to have intricate knowledge of domestic/cross-border
finance, accounting, legal and taxation subjects.

SOURCES OF INFORMATION
We collected information from following sites

 www.wisegeek.com
 www.bajajcapital.com
 www.wealthmanagement.kotak.com
 www.icicibank.com
 www.hsbc.co.in
 www.religare.in
 www.standardchartered.co.in
 www.capgemini.com/Solutions / Wealth Management
 www.wikipedia.com
 www.economywatch.com
We collected information from following Newspaper Articles

 Business line
 Financial Express
We collected information from following Reports

 World Wealth Report 2009 by Capgemini and ML
 Asia Pacific Wealth Report 2009 by Capgemini and ML
 Celent report on World Wealth

ANNEXURE
1. QUESTIONNAIRE FOR CONSUMER SURVEY
1) Name : Mr./Ms ............................................................................. Cont. No.......................

2) Age group : A) 22-34 b) 35 - 44 C) 45-55 D) More than 55 yrs
3) Sex : MALE FEMALE
4) Marital Status: Single Married Divorced
5) Occupation : Service Business Professional
Others ..........................................
6) No. of dependants: ................................ No. of Kids : ...................................
7) Gross annual income :
A) < 3,00,000 B) 3,00,001 - 7,00,000 C) 7,00,001 - 15,00,000 D) >15,00,000
8. Are you aware about the "Wealth Management Services"?

A) Yes B) No
9. What do you understand by Wealth Management Service?
10. Which kind of services do you use or will be use in Wealth Management
Services?
A. - Investment Planning
B. - Insurance Planning
C.- Retirement Planning
D.- Tax Planning
E. - Real Estate Planning

11. What is your concerned area when you use or will be use Wealth Management
Service?
12. What is your primary investment objective?

A. To earn inflation adjusted returns.
B. To preserve the initial capital
C. To maximize the long term growth potential
D. To earn regular income
E. To earn a supplement income and possibly some capital gain
F. Others…………………….
13. Which asset category will you prefer to allocate your money to?
A. Put the money in Equity shares
B. Invest the money in Mutual Funds
C. Invest in a balanced proportion with major allocation to Mutual Funds and shares
D. Invest in Bonds or Other Instruments to earn higher returns than FD's
E. Invest in Bank FDs, Post Off. Savings, PPF and Other Govt. Schemes
F. Others ……………..
14. Do you take advice from any financial adviser before investing?
A) Yes B) No
15. Do you believe that the systematic saving is easier and an efficient way of
saving?
A) Yes B) No

QUESTIONNAIRE FOR WEALTH MANAGER
Name of the Wealth Manager:

Age:
Organization:
1. What is the level of conceptual clarity of clientele about the Wealth

Management?
2. What is the basic objective of client while availing the services of wealth
management?
3. What are the concerned areas of the clientele regarding wealth management?
4. What are the kinds of questions asked by clients before or after taking services?
5. Which are the maximum services used by clients?
6. Details related to Client Profiles

a) Occupation :
b) Average Age :
c) Average size of their wealth :
7. What are the opportunities unexplored as yet in wealth management?
8. What are the problems faced in the wealth management sector?
9. How do you overcome the problems faced?

Wealth Management Sector - Opportunities and Challenges

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A

‘Prof. J.M.Bhatt’ Dr. Sarla Achuthan

Wealth Management Sector: Opportunities and Challenges

A Project Study Report

In Partial fulfillment of requirement of two years (or three years)

B. K. School of Business Management

Wealth Management Sector: Opportunities and Challenges

Jigar Modi Pratik Shah

Wealth Management Sector: Opportunities and Challenges

project, which has been a learning experience.

We appreciate the co-operation extended by Wealth Managers and

People whom we approached for the purpose of surveyed, the wealth

manager and people who gave us valuable information.

the librarian and administrative staff of B.K. School of Business

through out of the project and gave us valuable suggestion and

Wealth Management Sector: Opportunities and Challenges

As a part of the course curriculum, the student of Fourth Semester of

In spite of our best efforts, there may be errors of omission and

Wealth Management Sector: Opportunities and Challenges

Functional Areas of Wealth Management are Financial Planning; Portfolio Strategy

Wealth Management Sector: Opportunities and Challenges

2 Concept of Wealth Management 2

3 Scenario of Wealth in World 4-12

4 Wealth Management Services 13-24

5 Functional Area of Wealth Management 25

7 Wealth Management Process 30

8 Key Element of Wealth Management 34

9 Wealth Management firms in India 35

Wealth Management Sector: Opportunities and Challenges

10 Consumer Survey and Analysis 46-55

11 Wealth Manager Survey 56-61

12 Top 10 Wealth Management Mistakes 62

13 Porter Analysis Of industry Attractiveness 69

Wealth Management Sector: Opportunities and Challenges

Wealth Management Sector: Opportunities and Challenges 1

Wealth management is a financial service concept that emerged as a specific offering

Wealth Management Sector: Opportunities and Challenges 2

Because wealth management is a form of private banking services, persons wishing to

Wealth Management Sector: Opportunities and Challenges 3

Wealth Management Sector: Opportunities and Challenges 4

Wealth Management Sector: Opportunities and Challenges 5

Sources : World Wealth Report 2009 by Capgemini and ML

Wealth Management Sector: Opportunities and Challenges 6

Wealth Management Sector: Opportunities and Challenges 7

The region's Ultra-HNWI population declined by 29.6% to 14.3k individuals, compared

Wealth Management Sector: Opportunities and Challenges 8

Sources : Asia Pacific Wealth Report 2009 by Capgemini and ML

Wealth Management Sector: Opportunities and Challenges 9

Sources : Asia Pacific Wealth Report 2009 by Capgemini and ML

Wealth Management Sector: Opportunities and Challenges 10

 Untapped market potential

Wealth Management Sector: Opportunities and Challenges 11

Wealth Management Sector: Opportunities and Challenges 12

Wealth management offers the following services:

 Investment planning: assists a person in investing his/her money into various

Wealth Management Sector: Opportunities and Challenges 13

Investment Planning Process includes:

Essentially, Investment Planning involves identifying his/her financial goals throughout

His/her success as an investor depends upon his/her ability to choose the

Wealth Management Sector: Opportunities and Challenges 14

Insurance Planning is concerned with ensuring adequate coverage against insurable

Wealth Management Sector: Opportunities and Challenges 15

Wealth Management Sector: Opportunities and Challenges 16