Like doctors are necessary to check your body’s health, it is equally necessary that you hire an expert to check your financial health: to manage your wealth, advise you on smart investment options, savings for future, tax planning, etc. So what exactly is wealth management, and why do you need it?

This example will help you understand it in a better way –

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:

  • Relationship Manager (RM) – This entails direct interaction with clients, solving their issues and advising them
  • 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. Complexity and requirement of every client will differ, according to their financial goals and requirements.

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