Talk about importance of service & how to build trust with clients
Talk about CFP and importance of certification
Knowledge upgradation – how it should be a continuous process.
What does a financial planner do?? Discuss about financial planning.
The emerging changes in the wealth management spectrum
The Emerging Changes in theWealth Management Spectrum in India Presented by : Vyas Rai Nagpal, BA LLB
Transformation of the Industry The Wealth Management industry in India is a prime example of the success of free competition in the country With a GDP growth rate hovering around the 9% mark and a strong future outlook, India’s growth story is making it an increasingly attractive market for wealth management firms. This trend is expected to continue, with India estimated to become the third largest global economy by 2030. (Source: Cognizant Reports)
Current State of Financial Inclusion * Source: AMFI, CBDT, RBI, SEBI, NSDL, CDSL & IIMS Dataworks Survey 2007
Current State of Financial InclusionTotal Gross Savings 2005-06 (P) 2006-07 (P) 2007-08 # (Rs In Crores) 597,694 768,730 734,372P : Provisional. # : Preliminary Estimates * Source: RBI Data, 2008
With whom would Indians trust theirmoney? * Source: IIMS Dataworks Survey 2007
Selling Preferences of FinancialIntermediaries Business ProfileAge Profile Financial Intermediaries’ profile is not restricted to a single product or service LI : Life Insurance Scope for skilled employment generation at varying age profiles * Source: IIMS Dataworks 2008
Size and Growth of WM IndustryThe total size of the HNWI population in India is just 53,000 a meager figure compared with a maturemarket such as the U.S. However, with the total HNWI population presently growing at over 20%CAGR, and the value of liquid assets expected to grow at 19.8% CAGR (see Figure 1), India is oneof the fastest growing wealth management markets. Also, overall HNWI liquid assets (whenmeasured as a percentage of Indian GDP) are increasing at a healthy pace, indicating the expansionof investable wealth in the economy (see Figure 2).
WM Objectives and Channel PreferencesFinancial Literacy• However, awareness of available financial products is low in the target population,especially in Tier 2 and Tier 3 cities. In addition, a number of factors — including aseries of high-profile scams, detrimental practices of advisors with a short-term viewand the lack of a strong investor protection environment — have contributed toinvestor insecurity.• This is the primary reason for Indian investors taking a myopic view towardsinvestments, largely discarding the option of long-term investments and personalretirement planning unless offered as an additional tax savings instrument.
WM- Organized & Un-Organized Sectors•The share of unorganized players (typically independent advisors or smallbrokers/agents offering financial advice) has shrunk considerably over the last fewyears, primarily due to the increased presence of organized providers, as well asincome and profitability pressures that have resulted in consolidation (see Figure 3).•This has caused an increase in liquid assets available for organized wealthmanagement players, which has contributed to their growth in assets undermanagement.
Current Primary Focus of WM Firms Qualified advisors will be the best brand ambassadors for new firms seeking to gain a competitive edge against established players Investor education programs could deliver information pertaining to various asset classes and the associated risks, fee structures and benefits of each. Establishing trust is a vital component for any successful brand-building exercise in India.
Strategies Opted by WM Firms Invest in brand building to build trust Invest in advisor technology to improve productivity and advisor retention. Offer a 360-degree view Shifting to a profit-sharing model (where the advisor’s fees are based on the overall performance of the portfolio) would help mitigate issues to some extent.
Questions Clients Ask - 1 ―I’ve just received an offer for a new job. Can you tell me if this salary structure is in my best interests?‖
Ponder… 1. Is this asked of by every distributor? And if not, why?
The Answer Is Trust ―Integrity is what you are when no one is looking.‖
Questions Clients Ask - 2 ―Which is the best Mutual Fund to invest in?‖ ―Do I need insurance?‖ ―Shall I sell this property now?‖
Competency Is Essential… ―Knowledge is the only instrument of production that is not subject to diminishing returns.‖ --- J M Clark
…Without Complacency ―It’s what you learn after you know it all that counts.‖ --- John Wooden, college basketball coach
Financial Architect! Understand needs, arrive at a budget Make the drawings, get okay, convert to blueprint Build the house
Opportunities of No Entry Load Rule Relationship becomes more advice and customer centric than transaction based Will open doors for Wealth Management Good advice will be appreciated and hence rewarded Customer service will be the key Knowledge is a must, hence certification becomes important Those who work in clients interest will be rewarded
Immediate Issues Difficulty in putting a value to your service & advice Building the right business model Maintaining brokerage structure may be difficult and cumbersome and bulky Technology – Online platforms with direct investments Immediate cash-flow concerns
Need for Qualified Advisors ! The Current Indian Financial Advisory Market is looking for Brand building through its ―Qualified Advisors‖ as Brand Ambassadors Qualified Advisors shall develop trust with the clients on a better footings IFA’s require a qualification to equip themselves with the required skill set and knowledge to call themselves as ―Qualified Advisors‖
New Certification’s / Degree’s for the“Qualified Advisors” American Academy of Financial Management TM’s was founded in 1996, its professional development programs are Executive Certification Programs that are designed to ensure ―PRACTICAL WORKPLACE RELEVANCE‖ The American Academy of Financial Management TM is a worldwide Board of Standards and financial professional organization, with members in 150+ countries offering our exclusive certified designations, charters, and masters certification to candidates who meet the high standards. AFMTM now has representative offices in the US World Trade Center N.O. Center, Hong Kong, Beijing, India, Dubai, Kuwait, Latin America and South America, Singapore, The Caribbean, Europe, and more. Moreover, AAFM™ is a candidate for recognition from the United Nations. AAFMTM mandates consent to high standards of professional conduct, and AAFM activities are International in nature and scope. As seen in the Wall Street Journal, CNN, Financial Times, The Hindu National, The El Norte Latin America, The Arab Times, and The Beijing Times.
Certification / Designations Some of the AAFM Certifications are: CWM - Chartered Wealth Manager Certification™ RFS - Registered Financial Specialist™ RBA - Registered Business Analyst™ MFP - Master Financial Professional™ Many other Certifications they have to offer to the Industry …………………………………………….
CWM - Chartered Wealth ManagerCertification™ Wealth Management is one of the fastest growing disciplines of the banking sector. The CWM focuses on developing relationship management, sales, communication and core financial planning skills to equip Wealth Management Professionals with graduate education. The AAFM CWM Program is a Federally Copyrighted Program founded in the United States with Wall Street Sector Trademarks owned by AAFM.
RFS - Registered Financial Specialist™ Covering financial planning, asset management, investment advising, and insurance topics, the RFS is the fundamental graduate qualification on AAFMs Banking and Investment Management program.
RBA - Registered Business Analyst™ A strategic MBA refresher with an intensive coverage on innovative and high-powered graduate level finance, business analysis, and leadership topics. Designed for the busy executive or upcoming management graduate. Includes focus on competitive intelligence and benchmarking.
MFP - Master Financial Professional™ Available via accreditation legal recognition agreements and articulations. Complete a degree from an AACSB and ACBSP double accredited programs with concentration in finance, and then become immediately eligible for MFP. The MFP Path is the first Graduate credential that is awarded for completing a 4 year program or graduate program from an accredited institution. The MFP establishes the fundamental global standards required for the Financial Professional in todays business environment. It recognizes concentrations in finance, economics, investments, asset and portfolio management, ethics, regulatory issues, tax, and accounting. It is also available as a conversion program.
Certification / Designations Launched In India Recent launch in India is CWM - Chartered Wealth Manager Certification™ CWM has 2 Levels of Examination Level 1: Foundation Course Level 2: Awarded with CWM Course Duration: 3- 6 Months Globally Recognized : The Certification will directly be awarded by American Academy of Financial ManagementTM, USA