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March 2022

Wealth Management – The Evolution and A Journey!

Over the last decade, we have witnessed rising number of sophisticated investors in the financial market and the significant shift from offshore to onshore wealth management. In this context, many wealth managers and advisory bodies have laid momentous effort on optimizing their operating models in coherence with the interest of the rising class of sophisticated investors. The industry has also woken to redefining the complete spectrum of value propositions made to clients and how value is added to this procedure through the perfect combination of products and services, strategies and process, people, platform and pricing. Thus, the commitment to reinvent value proposition and plan to satiate the needs of the new age sophisticated investors are high up on the strategy.

Addressing both the purposive and de rigueur evolution demands knowledge, experience and consistent performance at the foundation to be able to take a step back for introspection before moving forward at a radically different pace. Our experience as an independent wealth management firm in India highlights the emphasis laid out by the modern investor on a holistic model carved with globally accepted investment process keeping the typical conflict of interest at bay. The appreciation for forward looking advice based on multi-asset multi-factor models utilizing best in class investment solutions has gone up way higher.

Models hinging advisory are of utmost importance as wealth management is fundamentally an advisory service that combines financial instruments and services to address the needs of the investors. As the takers become more sophisticated, the advisory models need to keep up by focusing on continuous advancement picking on merit-based selection. Wealth management models are broadly of two types; one basing the approach on a particular strategy or transaction at a time and other following portfolio management approach, where multiple strategies can interplay around the core goal. Later approach has heightened emphasis on investor’s objectives, thus, providing client centric solutions and high quality customised counsel. This model has been trusted more by wealth management service platforms globally and is catching up in India too. Un-biasness of approach followed by such firms without any obligation of selling and independence from large group offering broad based financial services gives luxury to innovate and curate world class solutions solely focusing on delivery value to clients on their short-term and long-term goals. Product and market neutrality can be observed easily if required in line with the trend analysis.

The approach serves long-term strategic investment very well and has gained followers over the past few years. The markets are dynamic and ever evolving, and so are its complexities. To matchup the expectations of the investor via delivering efficient risk adjusted returns in the complex financial markets; wealth management institutions also need to learn, evolve and follow global practices on how to safeguard the interests of investors. As in investor, we often delve deep into the financial strategies, track historic returns, portfolio composition and risk reward matrix, we also track the indices performances and plot them against our holding assets but very seldom we track the performance of our advisors, benchmark them against multiple market cycles, assess the track record of their recommended strategies and evaluating their risk adjusted advisory models. To our mind, this is one of the key ingredients of having an efficient wealth portfolio.

In the current era of accessibility and awareness, Investors are far better equipped with financial knowledge and hence, assume an active role in the process of advisory and investing. They display keenness to indulge in the investment procedures, planning, expect professionally tailored custom advice from their advisors and appreciate transparency while understanding the mechanisms of their investment blueprints.

Wealth management is not just about investing to make money, rather a plan to preserve and grow the wealth for the investor and their future generations. Understanding the investor as a partner alongwith objective and emotional assessment of their needs, objectives, goals, life stage has come to the fore. An efficient advisor would like to work with a purpose and framework ensuring allocation towards bringing value to the portfolio and consequently to the life of the investor by addressing the complexities and rendering support at emotional times that might negatively influence financial decision making.

Advisors must engage with their Investors as their personal CFO and go beyond the traditional wealth management and counsel on new merging asset classes, family office & legacy planning and so on…

Advisors should also look at educating their investors through understandable metrics to navigate complexities of financial markets together ensuring Investor Wellbeing.

Happy Investing!


Ashish Saxena
Vice-President- Wealth
Client Associates, Gurgaon
Reach at: ashishsaxena@clientassociates.com