Wealth Management


What is Wealth Management?

Mr. Moneybag is the head of a large conglomerate. His spouse and sibling are partners in the business. As a business family, the Moneybags have multiple concerns related to their money. They have a combined asset base of close to INR 100 crores. They have businesses in India as well as Europe. This leads to different currency revenues as well as different taxation policies. They want to make their money grow while protecting the principal. They want to create a trust fund for their future generation. They also want to minimize their tax outflow. They would also like to know if there are any interesting avenues for them to invest in. The family is too busy handling its business concerns and needs external help to manage their money matters. This is where Wealth Managers come in.

Wealth Managers are typically financial advisors who help their clients achieve their financial goals. The clients are usually high net worth (HNI – investible surplus greater than INR 5 crores) or ultra high net worth individuals / families (UHNI - investible surplus greater than INR 25 crores). Wealth Managers help their clients safeguard their wealth, plan retirement and other financial goals (like a foreign education for their kids), help with taxation issues, create legal entities like trust funds (estate planning) as well as multiply their money by suggesting appropriate investment options. They usually charge a fee and / or a commission for their services. Thus, the focus is not just on advising where to invest – rather it is holistic approach aimed at marrying the clients’ financial goals with their likes, dislikes and risk appetites.

Within wealth management, one could opt for two types of finance related jobs:

1. Relationship Manager (RM) – This entails direct interaction with clients, solving their issues and advising them

2. Product Management – Here there is no direct client interaction, however, the product managers devise and maintain investment products for the firm’s clients.
In smaller firms, the above roles are often merged.

Key skills required :

Key skills for an entry-level role would be:

1) Confidence and excellent communication skills: A bulk of wealth management roles is of the relationship management type. Here, a confident persona and the ability to carry out meaningful conversations with UHNI and HNI clients is a top required skill. The RM must be able to understand client requirements and also be able to put forth his /her suggestions to the client effortlessly
2) Knowledge of investment products: UHNI and HNI clients have a lot of money waiting to be invested in a plethora of different products. It is essential that the RM or product manager is well versed with different types of products and is able to suggest these and even generate new ideas
3) Spotting investment opportunities: Market awareness is highly essential. A Wealth Manager needs to be on top of what is ‘hot’ in the market and see if it makes sense for the client to invest / sell. Mistakes made while suggesting appropriate investments can cost the employee the client, his/her job or his/her reputation
4) Proactive nature: Wealth Managers have to be proactive and assertive. A shy Wealth Manager or one who is simply reactive earns no respect from the clients
5) Problem solving: Clients call up the RM from time to time to discuss problems / issues. The RM must be a great problem solver with good turnaround time
6) High level of integrity: Since Wealth Managers are privy to details of the assets of their clients; they have to be high on integrity or risk losing face for themselves and their firm  

How to get in:

Wealth management in India is still at a nascent stage, as a lot of Indians still don’t believe in paying someone to manage their own money. However rising affluence, evolving financial products and changing attitudes are making this a sunrise sector

• MBA graduates are often sought after for these roles since they have a good understanding of financial markets and products.
• CAs as well as graduates in the economics of business administration fields would also find a good fit. 
• A Chartered Financial Analyst (CFA) or Certified Financial Planner (CFP) certification is very sought after and signals your interest in this vocation.

  • For RMs, the majority of time is spent with clients, either on the phone, email or personal visits. Companies often give their RMs targets to achieve. They also need to sit down with the Product team from time to time to understand the latest offerings of the firms. Apart from this, they have to read up constantly on the market and be up to date on financial happenings.
  • For Products Managers, the majority of time is spent in devising new product strategies, executing them as well as reviewing existing product lines. They also attend several internal meetings, and have to relay the product strategies to the RMs.
  • A wealth manager’s job can be stressful considering he/she is responsible for a large amount of money and assets. Any small mistake and there can be grave consequences. Constant interaction with high profile clients, although very rewarding, can be mentally exhausting at times.

Companies to target :

• Most banks have their own Wealth Management divisions:
o   Kotak Wealth Management, HSBC Wealth Management, ICICI Wealth Management, Citigold etc.

• Financial Institutions:
o   Aditya Birla Money, Karvy Private Wealth, Motilal Oswal Wealth Management etc.

A day in the life of a Wealth Manager(entry level) :

  • Wealth mangers typically start off the day checking for any emails or phone calls that need to be made to clients / internal teams
  • They often have meetings lined up and may have to step out of the office to meet new clients / address any bigger issue with existing clients
  • There is a lot of paperwork to be done usually pertaining to the transactions of clients, hence a lot of time is actually spent at the desk
  • Internal meetings also take up a lot of time
  • Spare time if any, is often spent in trying to catch up with financial markets and other news

Salary and perks :

  • The starting salary for Relationship Managers and Product Managers in the Wealth Management divisions of large banks could be anywhere from INR 8L onwards. (These are usually candidates from top notch B-schools). Commissions are paid on top of this, which are as per the performance of the employee.
  • Smaller banks and financial institutions typically pay around INR 5-6 Lacs at the start(They often source from undergraduate programs)

We are interviewing a wealth management expert currently. Once we done with the interview, we will publish it..