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    Bank of america merrill lynch Bank of america merrill lynch Document Transcript

    • Bank of America Merrill LynchThe bank has carved a niche for itself as a leading global financial firm, one which deliversinsightful solutions to clients combined with an extended global reach and a strong emphasis onbuilding long term relationships.The banks India-based coverage specialists and product professionals work together to leverageBank of Americas global strength to meet clients comprehensive needs including workingcapital needs, treasury management, trade finance & solutions, capital raising, risk management,forex and fixed income.The global merger of Bank of America N.A. and Merrill Lynch additionally brings to clients anenhanced product suite of services through DSP Merrill Lynch, a pre-eminent investmentbanking, securities and wealth management services firm.The group brings a unique blend of global reach and local expertise sharing over 100 years ofcombined India experience. DSP Merrill Lynch is an affiliate of Merrill Lynch & Co., asubsidiary of Bank of America Corporation. ICICI BankAt ICICI Bank Wealth Management, they understand you may have a unique view of wealth.Thats why they have designed new Wealth Management offerings to give you a comprehensivesuite of services that match your financial needs at every stage of life.To service your varied needs like buying property, seeking loans for personal or business needs,investments and insurance, experts on different products will work closely with yourRelationship Manager.Together, these experts bring to the table ICICI Banks expertise across various financialproducts, offering you enhanced service levels, quicker responses and end-to-end solutions,customised to your present and future needs. Religare MacquarieReligare Macquarie Private Wealth (RMPW) is the coming together of Religare and Macquarie.
    • Backed by the global expertise of Macquarie and strong local insights of Religare, at RMPW,they have designed a refreshing whole new approach for managing, growing and preserving yourwealth.It is dynamic yet thoughtful, brisk yet measured. An approach that succeeds by placingknowledge in all its dimensions into active and advancing application.They construct an environment that constantly endeavors to be a notch above the rest by seizingevery latent opportunity.At Religare Macquarie Private Wealth they aspire to be India‟s premier private wealthmanagement firm catering to the needs of discerning HNI‟s backed by the global expertise ofMacquarie and local insights of Religare Kotak Mahindra BankThe Kotak Mahindra Group has one of the oldest and the most respected Wealth Managementteams in India.Kotak offers the widest range of wealth management products to High Net-Worth Individuals forover thirteen years, emerging as the largest Wealth Manager by a wide margin.The Kotak client base ranges from entrepreneurs to business families, and also includesemployed professionals.Kotak provides financial advice and manages wealth for 30% of India‟s top 300 families withwealth management offices spread across 9 cities in India. Credit SuisseCredit Suisse has long been renowned as one of the worlds leading financial institutions. Theirbroad capabilities enable them to meet the individual needs of a diverse range of wealthmanagement clientsCredit Suisse serves more than 2.4 million clients with: Exclusive personal service Expert advice on how to protect and grow your wealth The wisdom of years of financial experience
    • You benefit from their extensive global experience and presence, coupled with a structuredadvisory process which enables them to deliver tailor-made solutions in line with yourinvestment objectives Karvy WealthFormed from the merger of the erstwhile Karvy Private Clients Group and Financial PlanningGroup, Karvy Private Wealth is the Wealth Management arm of the 25-year-old KARVY Groupand focuses on providing wealth management advisory services to high networth individuals.Karvy Private Wealth has also acquired wealth management boutique, PARK FinancialAdvisors, which has brought in some quality senior management as well as given a kick-start tothe business.Karvy Private Wealth is powered by a talented leadership team. Based out of Mumbai, thecompany has branches in Bangalore, Chennai, Delhi, Goa, Hyderabad, Kolkata and Pune. CentrumIn a crowded milieu of claims and promises, Centrum seeks to differentiate itself on the coreingredient of building trust when it comes to helping customers with their wealth.Their advice on wealth is an outcome of an intimate and intense engagement process with theclient and rests upon the team‟s solid experience, unbiased knowledge and a steadfastcommitment to client objectives.Centrum strives to constantly build and nurture this engagement framework to work to clientadvantage and thus grow the wealth advice practice of the firm over the longer term.Centrum‟s strengths and core value proposition for clients is its people who share this beliefsystem with a passion and who stand up with confidence to the test of experience, knowledgeand client commitment.Financial markets and products are diverse and complex. Client situations too can be extremelydynamic.History has consistently shown that advisor capability has been challenged time and again bymarket realities. Client confidence in advice too has gone through its share of ebbs and highs.
    • Their approach towards advice is engineered therefore around prudence and towards creatingenduring longer term relationships something that Centrum has successfully built across theareas it operates in.As a result Centrum‟s client engagement framework is anchored in some time-tested principles -of understanding client objectives across time horizons, being extremely sensitive to uniquecustomer circumstances, experience and requirements, objectively assessing risk tolerance andpresenting solutions that are carefully tailored to the customer‟s situation at all times. AnandRathiThey believe that separation of advisory from product manufacturing is critical to offering aconflict-free and truly objective advice to clients.They therefore offer only third-party products and do not manufacture any in-house products. Asan extension to this philosophy, they do not hold any proprietary stake in the marketsA Wealth Management solution for every individual is unique. Hence you deserve a customizedsolution for managing your wealth that is specific to your needs and not a generic template –based offering RBS - Royal Bank of ScotlandLeveraging the global capabilities of RBS, they have recently launched the Royal WealthManagement business in India.RBS is one of the worlds leading providers of comprehensive financial planning and wealthmanagement services to individuals and corporations.Their ability to deliver a unique investing experience to clients is underpinned by a client centricapproach and comprehensive industry research.They understand that greater the wealth, the more complex the needs and higher level of personalattention required.At Royal Wealth Management, they offer you an unmatched blend of personalized wealthmanagement opportunities.Your Relationship Manager is a trained professional tasked to understand your wealthmanagement needs and track your portfolio.
    • Product Specialists are also part of your team and offer you access to investment, insurance,asset disposal, and succession planning and taxation services.Client Associates handle your day-to-day transactions.Together your team of Relationship Managers, Product Specialists and Client Associates worktowards assisting you in meeting your unique needs and tailor them to the different stages ofyour life.Drawing on unparalleled global presence, top-class market research and the worldwide marketinsights of the RBS Group, they provide innovative wealth management solutions designed tocater to different market environments. Barclays WealthBacked by a senior management team with extensive Asian private banking experience, Barclaysis well-positioned to capitalize on the growth of the Asian economies, focusing on key targetmarkets of Greater China, India and Indonesia.The team of senior experienced private bankers covers the North Asian market out of the HongKong office, and serves the Southeast Asian and South Asian clients out of Singapore.In addition, high net worth individuals in Japan are served through a private banking jointventure with Sumitomo Mitsui Banking Corporation and SMBC Nikko Securities.In India, they currently have wide coverage across five key Indian cities - Mumbai, New Delhi,Chennai, Bangalore and Kolkata - and with the market-leading proposition they are well-placedto serve the needs of Indias business families and entrepreneurs.Note: These top private wealth management firms in india account for more than 50 % marketshare collectively in the wealth management market in india.Do visit the websites of each of these companies, to ascertain your requirements before youapproach any of them to handle your wealth.
    • What is the difference between wealth management and portfolio management? & Top 10mistakes in wealth management.This is easily one of the most frequently asked questions by many – even those who are alreadytied up with wealth management services. And, with the number of wealth management serviceproviders 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 amountsto managing the asset portfolio, which usually has three components, like real estate, equityholdings and some insurance. And even in this, the real action is around the equity portfolio –how much you are earning, how your capital is growing, and so on.But the essence of wealth management, as most managers would tell you, is distinct fromportfolio management. It is more long term and entwined with your life rather intimately. It is thecreation of wealth to meet individual goals and the goals of the family. It even goes beyond yourown life, it could even include your philanthropic and other related aspirations of seeing thatyour 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,” says Patrick Schneider, whoprovides consultancy services to many overseas wealth management firms. And this is not anIndia-specific phenomenon. Many countries that see an explosion of wealth will have a largenumber of people who will have to deal with such dilemmas, he adds. And, India has the fastestgrowing number of millionaires in the world and therefore the problem is rather prevalent here.1. Going it aloneAnd 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 theusual response. And after completing his post graduation in business studies, even DhirajNikamfelt this way. “But it gets more than that. I cannot concentrate on my profession and business andalso manage wealth. This is a realisation I had,” he adds.Professionals like lawyers, doctors and even trained financial professionals need specialisedwealth management support. And this is because it is not about placing monies in pre-designedcompartments – 10% in fixed income, 40% in real estate 40% in equities and the rest ininsurance. It is not a product of a software program, but a series of iterations that result in assetallocation, which is designed to meet your life goals.Professional wealth management service providers go a long way in understanding you and yourneeds, your lifestyle and your family. They then come up with several plans that could enableyou to grow and distribute your 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 morethan one service provider. VikasAgnihotri, CEO, Religare Macquarie Private Wealth says, “InIndia, clients provide only a portion of their portfolio to one wealth manager, hence the advice issuitable for only a part of the overall client portfolio. This is in contrast to international practicewhere investors engage with one wealth manager to provide holistic advice on their entireportfolio. It not only allows disciplined approach to investments but also helps clients achievetheir investment objectives.”And when you express your desire to chose a wealth management partner, there will be manywho will line up for what is known as the „beauty pageant‟ and will present their abilities tomanage your wealth. Here, it can be said that it is better to avoid service providers who base theirincome 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 theproduct itself and its match with your life goals.While most financial planners and wealth managers would be good and competent, one cannever be sure of their genuineness. Hence, doing a background check before deciding onsomeone is a must, for there are still those unscrupulous advisors lurking around, only waiting tocatch their next prey.Yes, the process of choosing a wealth manager should be even more carefully done, thenchoosing someone to employ. Hence, references are more important here, and, checking up withthem equally so. It is, after all, your entire wealth and life you are going to be discussing withthis person.When you go to a wealth manager, note, most of them will have the gift of the gab, but under nocircumstances should that intimidate you or make you passive. After all it is a service you wishto buy, hence it is important to ask questions, determine what their plan of action will be andhow your money will be invested. Prepare a list of questions you would like answered, to putforth to your wealth manager. Remember, being free and open about talking to your manager,being able to disclose everything and, most importantly, having a comfort level and rapport withhim is a must.3. ClarityLokeshNathany, national head of wealth management, Almondz Global Securities feels “One ofthe most important parts of wealth management is asset allocation. This is a critical area wheremany people have made mistakes, by jumping around too much or not changing at all.” And thishappens because there is no clarity in why the wealth manager was approached.“We often get clients who have come to us because their friends told them at a party that ourfirm had helped them get some quick returns. So here they are,” says a relationship manager witha global wealth management firm.
    • Though not water-tight, you have to have some clarity on the broad goals that you want toachieve in your life. These goals could be in the form of your children‟s education, buying afarm house, children‟s marriage, retirement and even beyond your demise.4. Revisiting objectivesObviously, as life goes on, objectives and goals keep changing. And when these happen, thewealth manager or the relationship manager must be consulted to reset the entire portfolio. Andthis is a critical aspect many clients tend to forget, says a wealth manager. In case you have amarriage plan changed to a closer date than planned then you would might have to liquidate afew assets that you have kept for that date. Now, which are the assets that you would liquidateand how do you restructure the portfolio? Such decisions must be taken after great thought,reckon experts. But revisiting objectives just because market circumstances have changed andreshuffling 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 notexactly short-term), revisiting objectives and a reshuffle might actually work.Nathany adds, “Asset allocation, however, should be reviewed periodically and strictly. If it wasdecided your allocation would be 70% equity and 30% debt, during an equity boom this maychange to a 90-10 ratio.”5. Panic / greedWealth management is a long term process and there will be times, especially in the bull-run,when you would be tempted to risk more. These are the times when long and detailed wealthmanagement plans are often shelved, sometimes broken down to indulge in speculation. “One ofmy clients actually broke our relationship and placed all his wealth on the markets, he evenborrowed 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 notwanting to be named.It‟s first greed and then panic, he adds. You might want to keep some funds aside forspeculation, but do not interfere with your wealth management capital and your life goals, unlessany of them have changed.6. Communication hasslesWealth managers usually will keep sending you a lot of mailers and documents to keep youabreast of your wealth position. Now, there could be an information overkill situation. However,you need to be clear about where your funds are being allocated and how are they beingmonitored. 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 addressyour communication needs.7. Protection
    • Often enough, wealth management is considered to be just about growing a set capital and thendeciding how to distribute these monies. Many times, the aspect of protecting and coveringassets and lives is not looked into. And many wealth managers, especially those attached withbroking firms, tend to overlook this factor as well, or would include this in the investmentbasket, by using the unit linked route.This is a grave mistake. You need to insist to your wealth manager to include the insuranceaspect as well. And it is most likely that your wealth manager will actually provide you withsome sound advice here. “The commissions from life insurance are quite attractive,” says Nikam.8. Neglecting succession/estate planningThere have been umpteen cases where the family members of the deceased have been involvedin bitter legal wrangles over sharing the estate. And most of this happens because a proper legalwill was not prepared. Planning the „will‟ much earlier will ease much of the tension. Yourphilanthropic activities can also be scheduled in the will.Moreover, wealth managers now offer trust services where trusts can be created for variouspurposes and their execution can be managed by the wealth managers. And trusts can be createdeven when you are alive and they will be managed according to your wishes and direction.9. Involving familyThough it comes at the bottom of the rankings, not involving your family in the wealthmanagement process could easily be one of the biggest mistakes. Experts recommend thatspeaking and sharing your overall plans with your family.Discussing the life goals helps as the clarity, understanding and alignment of all family membersis enhanced and therefore the wealth manager can then set up a solution that best fits yourrequirements. And with the family members involved, the sense of participation also increases,reckon wealth managers.10. OverdependenceLastly, wealth managers are human too and they make mistakes. Being completely dependent onthem could be as counter-productive as constantly prodding them with suspicion. However, ahealthy sense of accountability must be established where performances are questioned andmonitored.Having looked at all these factors, wealth management can be a rewarding experience that canhelp you fulfill your dreams and aspirations. It can, as a wealth manager says, enable you to seethe fruits of your labour and enterprise be translated into happiness. It just requires some smartdiligence.
    • Wealth management growth in India is 2ndhighest in the worldSutapa Banerjee, head of the wealth management arm of Ambit Capital says that India is one ofthe most exciting markets in the world with respect to wealth management. In conversation withRitu Kant Ojha of The Indian Express, she says,„The success of entities in WealthManagement will depend primarily on the client segment they choose to cater to and howfocused they are in this area‟. Excerpts:How big is the wealth management market in India? How do you categorize a client as a wealthmanagement client (minimum corpus to avail service)?In 2009, according to published reports the assets of dollar millionaires was around 477 billionspread across 1,26,700 households and is expected to grow to a trillion by 2012. Typically aprivate wealth client is defined as one with a minimum of 1 million USD of investible surplusexcluding primary residence and consumables. At Ambit we target Private clients who have aninvestible surplus of at least 4-5 million USD.How is the financial planning process of a normal client different from a wealth managementclient?Financial Planning of wealth management clients is different as it entails more complexexecution and investment expertise particularly in products not typically available to all clients,e.g. private equity, structured notes, trusts, etc. Sensitivity to aspects like post tax returns andasset titling is higher since HNIs are taxed at the highest marginal rate of taxation. Theirportfolios also require more customisation in terms of schemes and products.What are the steps you follow to create a wealth management strategy for a client?It starts from understanding the investment needs, time horizon and risk profile of a client. Afinancial plan is prepared which covers all aspects from financial goal setting and asset allocationto structuring the appropriate vehicles for routing the investments. The portfolio is thenperiodically reviewed for asset allocation conformity and to ensure that all investments areperforming as per plan and rebalanced where required.Banks are getting into the wealth management space in a big way. How do wealth managementfirms compete with the banks who have extensive branch network and large human resource?In India it is not just Banks but also Asset Management Companies and Brokerages that haveentered the Wealth Management space, many of whom have extensive network in terms ofbranches / offices and large feet on street. The market for wealth management in India issignificant and the growth rate is the second highest in the world! The success of entities inWealth Management will depend primarily on the client segment they choose to cater to and how
    • focused they are in this area. For entities catering to the mass wealth client segment the presenceof a large branch network as also feet on street is certainly a distinct advantage since reach iscritical. However, for entities where, the business model clearly targets only ultra HNIs and theoffer is holistic end to end investment management, and the structuring of vehicles for routingthese investments, a distribution led model with large man power is not at all relevant.Transparency has been a big a issue in entire spectrum of wealth management and PMS.Citibank is a case in point where the RM duped clients of crores of rupees. What are theregulatory changes you would suggest for the wealth management space and what are yoursuggestions for the investors?Regulatory changes in PMS have made it quite transparent as all underlying assets are held in theclient‟s name. The client receives hard copy of his holdings each month which is sent from thePMS team directly to the client. Periodic investment reviews are conducted to ensure that theproduct is performing as per expectations.More than regulatory changes, entities in the Wealth Management space can mitigate this risk bydoing the following:-1. Statements are sent to clients from a Central Unit completely independent of RMs.2. Follow a multiple touch point model, which means the client is catered to by not just theRelationship Manager but also Product personnel, Customer Service personnel, as also theBusiness Unit Head from time to time.With so many wealth managers changing jobs frequently it is a good opportunity for the IFAsoperating at a local level to pitch a long term service so that the client has a luxury to speak tothe owner directly and most of the times for a much longer period. Do you think the wealthmanagement advisors working at a local level are a serious competition for you?Fundamentally, it does not matter whether a relationship is owned by a local advisor or not. APrivate Wealth relationship is intrinsically more Relationship Manager centric than otherbusiness relationships. Ambit Private Wealth is a niche business with fewer but more seniorRelationship Managers who have been in the business in excess of 10 years and hence the risksas detailed above are far lower. Also our multiple touch point model ensures that weinstitutionalise the client relationship to the extent possible, such that the relationship is not onlywith the RM but also with Ambit.How important is legacy planning for wealthy families?Since ultra HNIs have already created significant wealth, their legacy planning in terms offorming structures to create unencumbered wealth which can be transferred to the nextgeneration is important. Estate planning through trusts or wills depending on the complexity andrequirement of the estate forms an important part of theAfter the recent Citi Bank fraud case what is it you want to suggest to the investors?
    • The primary advice to investors is to avoid blind faith on just the RM. Apart from choosing acredible institution the client needs to interact with Product Personnel and the Business Headoccasionally. Calling for periodic portfolio reviews where individuals apart from RMs areinvolved should also be demanded by the investor. He should be also be looking at his monthlystatements which should be delivered to him independent of the RM.Wealth Management in India: Issues & ConcernsINTRODUCTION:-Management is what a manager does "the statement given by Louis Allen has very broadand meaningful meaning. Though we all know that Manage is nothing but to forecast andplan, to organize, to command, to co-ordinate and to control. The eminent writer andmanagement guru William Spriegal has given very valuable definition that Management isthat function of an enterprise which concern itself with the direction and control of thevarious activities to attain business objectives. Management embraces all duties andfunctions that pertain to the initiation of an enterprise; its financing the establishment of allmajor policies and the provisions under which the organization is to be run and the selectionof the principal officers.In the general view the word management is form with Manage + Men + T where Tstands for the factor time.The term wealth management also now a days having very importance. So many Bankingcompanies are engaged in the business of wealth management. The premier insuranceindustry is now booming because so many bankers are also adopting and playing safe in thebusiness of insurance the term called is Bancassurance. Now a days wealth Managementhas very craze in the business world. In a survey it was found that India had 100,000milliners day end of year 2006 is now grow up by 21% from a year earlier (Asia pacificwealth report).CONCEPT OF WEALTH MANAGEMENT: The term wealth management formed with twowords wealth & Management. The Meaning of Management we have already seen in thesteering introduction. The meaning of wealth is – Funds, Assets, investments and cash itmeans the term wealth management deft with funds Asset, instrument, cash and any otheritem of similar nature. While defining wealth Management we have to think in plannedmanner. "Wealth Management is an all inclusive set of strategies that aims to grow,manage, protect and distribute assets in a much planned systematic and integratedmanner. "MIDDLE EAST & WEALTH MANAGEMENT : In this globalized era Middle East countrieshave huge wealth management need. There are two types of wealth managementinstitutions. They are:-(1) Private Banks(2) Family Offices, engaged in the business of wealth management in Middle East. For our
    • information the wealth management institute (WMI), the first center of excellence for the wealth management education in Asia was established in Singapore in the year 2003. The wealth management Institute (WMI) is providing professionals for wealth management with a nice combination of learning and practical training. The aim of WMI is to establish Singapore as the Asian hub for wealth Management. Where Pvt. Banks and Family Offices are discussing about the strategies to capture the wealth management business in the Middle East. The global institutions are looking towards the Middle East to grow their wealth management business and attracting the big business houses by their attractive service providing facilities. Tapping in to the Middle East market it is very crucial for private banks and private wealth managers, the entry and increasing market share is not very easy task for them but they are fighting. The Middle East region has become very highly competitive over the last five years. Local banks now competing with international banks. WEALTH MANAGEMENT RANGE: - The range of wealth management can be expressed by this exhibit chart. CAREER STUDENT START OF CAREER RETIREMENT ESTABLISHED * Deposit based comfort A/C * Comfort A/c with credit limit * Premium A/c * Premium A/c * Credit cards * Gold Card * Platinum Card * Platinum Card Liquidity * Overnight money A/c * Overnight money A/cManagement * Money Market & Fixed Income Fund * Money Market & Fixed Income Fund (Cash Mgt) * Near Money Market Fund * Near Money Market Fund * ZINS Plus * ZINS Plus * Special Investments Wealth * Top portfolio * Top portfolio * Top portfolio Formation * Flagship portfolio * Flagship portfolio * Flagship portfolio (Savings * Titan portfolio * Titan portfolio * Titan portfolio Plans) * Capital formation benefit funds * Absolute Return Portfolio Wealth * Holding and Private EquitiesOptimization * Modular Wealth Management (Lump sum * Individual Wealth ManagementInvestment) * Premium Portfolio * Titan Portfolio WEALTH MANAGEMENT : INDIAN CONCERN :- Some times people confuse asset management or financial management with the wealth management. But wealth management has very broad area. Position of India in Wealth Management :- 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 we 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 last year. The biggest Asian economy China stands on second position with 20%, west Asia 16%, United States 4% and United Kingdom (UK) 2%.
    • So we can understand that there is more opportunities in the wealth management businessin Asia specially in India.ICICI BANK & WEALTH MANAGEMENT :In India ICICI bank and Axis-Bank are very well known banks in the field of wealthmanagement. ICICI Bank will float subsidiary for the purpose of WM activities in Canada &other market even as ICICI has rolled out ICICI Group Global Private Clients for those withnet worth of $ 1 million or more. ICICI GCPC launched their business in Dubai very recentlyin the month of April-08 and caught 2500 clients. They are going to add another 1000 highnetwork clients this year.ICICI Bank is using the services of global players like Merrill Lynch, City group, and UBS forcatching the clients for Wealth Management business. ICICI Bank and its subsidiaries areengaged in the development of various attractive products (services) for the clients with networth of $ 1 million.The eyes of ICICI Group Global Pvt. Clients on the rising number of dollar millionaires atpresent they are 100,000 in number in few year the number will definitely increase. IndiasNo.2 lender banker ICICI expects to sustain the 70% growth in its private wealthmanagement business. ICICI has 150,000 customers with investible surplus of at least Rs.10 lakhs equity, real estate and private equity is driving the private banking business inIndia. India has market of wealth management about $ 600 billion.AXIS BANK & WEALTH MANAGEMENTOne of Indias leading private sector banker Axis bank also combined with BanquePriveeEdmond de Rothschild Europe based wealth management expertise institution & is going tomake new standard for the NRIs wealth management.The LCF Rothschild group has based its reputation in the area of wealth management on itsbig banking experience. Actually the institution is engaged in the task of providing financialadvise to the Europes leading families, Government and various corporations for the last 7generations.The Axis Bank 5th largest bank by market capitalization in India provides payroll services toover 12000 corporates across 2.8 million salary accounts. The market capitalization of AxisBank was 235 million in the last year 2007 is engaged in the business of wealthmanagement, with its international presence in Dubai, Singapore Hong Kong, Shanghai andso on.SERVICES PROVIDED BY WEALTH MANAGEMENT INSTITUTIONS :-(1) Custodian Services:-(A) Securities Safekeeping(B) Income collection from Securities(C) Settlement of Securities trades as directed(D) Payment of fund when directed(E) Timely settlement delivery
    • (2) Trust Services:-(A) Charitable Trust(B) Revocable Trust(C) Irrevocable life Insurance Trust(D) Special Need Trust(E) Institutional Trust(3) Retirement Plan Services:(A) IRAs Custodian Or Trustee(B) Defined Benefit Plans(C) Defined Contribution PlansADVANTAGES: The following are the advantages of wealth management concept.1) Helpful In Tax Planning : The wealth management professional always shows thegood path to the customers and provide the service of tax planning. How to minimize thetax and save more money?2) Helpful In Selection of Investment Strategy: Another advantage from the customerpoint of view is with the help of WM Professional the customer can easily know theinvestment strategy and analyze risk and return.3) Helpful In Estate Management: With the help of wealth management professional wecan also manage our estate. Estate management is a task to provide objectiveadministration of our funds tailored to aim in responsible distribution and protection of ouroverall estate.4) Helpful in forward looking: We can say planning, that recognizes as our estate growsand changes occurs we require some team of professionals who help us in future planning.5) Helpful for Indian Economy: Banks which are engaged in business of WM earningrevenues from the foreign countries i.e. outsourcing for economyLIMITATIONS1. WM Reduces The Scope Of Management: Though we all know that management hasexistence at all levels of life and society but the term wealth management only related withthe higher level means rich people, and is not having any plans and provisions for poor andlower and middle level of society.2. Chances of Fraud: Another demerit or limitation of the WM concept is it is not showingthe actual position. The customer doesnt know about the things going on with using hiswealth and there may be chances of forgery and fraud with customers.3. Actual Picture VS Inflation: What is the actual position of market we dont knowbecause every thing is done by some WM professionals. So we can not assume our positionin the market that also results in inflation because economy is unknown about the actualstate. There may be chance that the customers are in risk but they are showing the falsereturn and vice-versa.
    • CONCLUSIONS:After studying the overall concept of wealth management we can say that it has variousaspects some are favorable and friendly for the Indian economy and some are verydangerous for the Indian economy. The customers have to beware and they have to makeSWOT analysis before choosing the wealth management option. At present Indian Economyis facing a lot of trouble by increasing inflation by 11.05% and hike in fuel prices in theIndian as well as international market. As per Indian concept wealth management can notsuccess in India. But if Indian financial institutions are engaged and choosing the WMbusiness in foreign countries, most probably middle-east countries, it may be some relief forthe downward moving Indian economy.Reference:Business Standard (News Paper). Delhi.Economic Times (News Paper). DelhiFinancial Express (News Paper). DelhiDeccan Chronicle (News Paper). HyderabadBusiness World (Magazine).DelhiBusiness Economy (Magazine). DelhiEconomic Political Weeklywww.axisbank.comwww.sbi.cowww.icici.comwww.pnb.comAny regulation or guidelinein wealth advisory business has to encompass different kinds ofplayers that exist in the market.The capital market regulator, Securities and Exchange Board of India (SEBI), has proposed aSelf RegulatoryOrganisation (SRO) for the wealth management industry to regulate the business.According to SEBI, the new SRO would also serve as a medium for SEBI to implement itsvarious initiatives for the wealth managers.Any regulation or guideline in wealth advisory business has to encompass different kinds ofplayers that exist in the market. There are a range of service providers in the wealth managementspectrum and the services they offer range from a pure advice to a level of comprehensiveportfolio management services.Wealth advisory businessIn the Graph, X axis represents the transaction authority of wealth mangers, which increases aswe move towards the right of the axis. A pure financial planner does not have any transactionauthority as his role ends with providing advice, and there is a total responsibility of the moneymanagement on the Portfolio Management Services (PMS) provider. On the Y axis, we have thefiduciary responsibility of the wealth managers which increases from a low to high for a PMS.
    • In a country such as India, there is a necessity for the existence of each of these players in thewealth advisory business. Any regulation governing the wealth advisory business has to beevolved taking into account the role, contributions and responsibilities of each of these segmentsin the creation of wealth for investors.When it comes to regulating, the simple financial planning advisor, as he is not executing anyinvestment contracts, the loss to the customer is the investment he makes, based on the advice. Itis important that such quality advice, which will have far-reaching implications on the life of acustomer, has to be given by a properly trained professional and, hence, a regulation specifyingthe minimum educational qualification or certification requirement to offer financial planningservice to an individual investor, has to be specified. In addition, an appropriate code of conductto be evolved with the treatment for breaches and continued professional development mandates.Attracting talentIn the case of a product distributor, there are multiple regulators governing the distribution andexecution of the contracts such as licence for selling insurance product from IRDA, AMFI MFcertification, NSE certification for capital markets, and so on. A product distributor selling agamut of these products needs to get multiple certifications from different authorities. If thisprocess can be simplified by bringing all these certifications/licences, it can help attract talent tothe wealth investment industry.We need a strong public campaign from the regulators on the need for availing of these servicesfrom the certified distributors only. In our country with a large investing population spreadacross the geography, these distributors play a key role in reaching to the customers. Any wrongsale by a group of them will affect a large section of the investing community, which necessitatesa stricter regulation on the kind of products hawked by these distributors.When it comes to further regulating the investment managers and PMS, in addition to theexisting regulations, a lot more care needs to be taken, as the product and execution complexityincreases substantially, and this is where quite a few errors or duping of the customers happen.The regulation to cover aspects such as use of power of attorney (POA), recommendation ofproducts based on risk profile, product nature, justification for recommendation, and method ofobtaining consent from customers, timing of execution, and avoidance of contra position.Investor protectionIn India, we have large corporate, banks offering investment management and PMS servicesthrough their employees. The employees are normally remunerated and rewarded on the basis offee income earned by the individual staff and, in such cases, there is a natural tendency on thepart of these staff to sell products that get higher income to them, which may not be in the bestinterest of the customer. A standard documentation encompassing risk evaluation, assetallocation, investment justification, remuneration to the advisor and the concurrence of theinvestor for the investment is recommended.
    • In addition to the above categories, we witness the emergence of Internet, telemarketing as ameans of financial products distribution in a big way, and the guidelines or self-regulationproposed need to specify the rules governing these business approaches also.The Indian financial market, with the high propensity to save by our people, is poised for rapidgrowth and change in the way we operate.The regulators are keen on investor protection by setting up appropriate SROs, regulations andincreasingly fixing the responsibility on the financial product distributors, which means that weare in for a lot more document-intensive investment actions.RBI and Sebito implement guidelines for wealth management industry news 14 March 2011Reserve Bank of India and capital markets watch dog Securities Exchange Board of India arelikely to implement new guidelines for the $1-trillion wealth management industry. Theregulators would likely take up the implementation of the regulations on a joint basis. They willalso keep an eye on violations.No specific regulations for wealth management for high net-worth individuals (HNIs) have beenframed as yet and they come under norms for portfolio management by the Sebi. Currently theyare being regulated by various regulators as per the sectors in which they are offering theirservices and according to an official, there are no comprehensive rules to regulate the wealthmanagers for services across various sectors, such as banking, markets, insurance, commodityand pension funds.The government has pooled in its various regulatory resourcesand the government has framed acomprehensive rule-book for wealth management practices. Inputs towards these were soughtfrom RBI, Sebi and other financial sector regulators.The first meeting of the sub-committee of the Financial Stability Development Council (FSDC)which met in Mumbai last week deliberated the issue of wealth management and private bankingpractices adopted by banks following the Rs350-crore fraud committed by a Citibank employee.According to the RBI, the committee deliberated on regulatory issues relating to wealthmanagement/private banking undertaken by banks. Select banks had been asked to share detailsof their wealth management businesses. They were asked to state their policy, procedures andsize of wealth management business.Sebi has also highlighted the need to take up joint efforts and to improve coordination both at theopertional as also the surveillance level, between different regulatory agencies to protect theinterests of investors in an increasingly complex world of financial products. According to Sebiexecutive director KN Vaidhyanathan, who heads the investment management department thatoversees foreign institutional investors and mutual funds at Sebi, the watchdog could not remain
    • silent and needed to address the ways the wealth management sector which straddles acrossdifferent jurisdictions, could be regulated.He sadi the markets were far too advanced now. He added the wealth managers straddled acrossproducts that cut through banking, capital markets and insurance regulatory frameworks.He said Sebi needed to integrate across regulators, not just at the policy level, but at operatingand surveillance levels too.The strong push for coordination and firmer control on these new areas of the financial systemassume critical importance agaisnt the backdrop of the Rs350-crore wealth management fraud atthe Gurgaon branch of Citibank. A Citibank relationship manager at allegedly used fraudulentdocuments to lure high networth individuals and companies such as the privately held HeroInvestments, an arm of the countrys largest two-wheeler maker.According to Vaidhyanathan the risk in the wealth management business lies with therelationship manager, as his remuneration is not completely aligned with the interest of thecustomer.