The document discusses wealth management, which involves optimizing, protecting, and managing wealth through financial planning and advisory services. Wealth management services are provided by various entities and involve understanding clients' needs, developing a strategy, implementing a customized plan, and ongoing monitoring. The goal is to help clients achieve their financial objectives at each life stage by developing an appropriate asset allocation strategy and managing risk.

1. Wealth Management
(WM)

2. Meaning of Wealth
Management
 A professional service to optimize,
protect and manage wealth
 An investment advice on loans,
investment and insurance
 Also advice on tax, estate planning,
business planning and charity
foundation.
 It is an ongoing process with define
steps that involve planning, execution,
review and management.

3. Wealth management
 Wealth management services are
provided by
 Corporate entities
 Independent financial advisor
 Portfolio managers
 Banks
 Brokerage houses

4. Need for WM
 Planning
 Asset Management
 Risk Management
 Lending
 Advisory Services

5. Wealth Management
Process
Understanding
Opportunities
and Issues
Planning
Wealth
Management
Strategy
Supervising
and
Monitoring
Implementin
g the Wealth
Management
Plan

6. Wealth Management
Process
 Understanding Opportunities and Issues
 Investors know thyself
 Understanding values, goals and needs
 Developing rational investment expectation
 Planning wealth management strategy
 Impact of Taxes
 Developing an investment policy
 Importance of asset allocation
 Integrated wealth planning

7. Wealth Management
Process
 Implementing the wealth management
plan
 Supervising and monitoring process

8. Goals of WM
 Asset Management
 Asset allocation aims to optimize return by
minimizing risk.
 Achieve the goal through diversification and
customized investment strategies.
 Planning
 Advance thinking and necessary services to
formulate, manage and complete financial
requirement

9. Goals of WM
 Equity Risk Management
 Preserve capital against decrease in value
of stock
 Generate liquidity
 Diversify the exposure

10. Stages in Human Life Cycle
 Childhood Stage
 Young Unmarried Stage
 Young Married Stage
 Both Partners Working
 Single Partner Working
 Young Married with Children Stage
 Married with Older Children Stage
 Post Family and Pre Retirement Stage
 Retirement Stage

11. Financial Needs
 Survival Money
 Household need for food, clothing and
shelter
 Liquid instruments
 Need for emergency situation
 Safety Money
 To meet life’s unexpected turns
 To protect the assets
 To protect the person who generates the
assets

12. Financial Needs
 Freedom Money
 Funds to support non - basic needs
 Investment in short term instruments –
savings, treasury bills, money market fund
 Gift Money
 Charitable institution or foundation
 Education and estate for their children
 Investment in long term instruments –
bonds, mutual funds, equities

13. Financial Needs
 Dream Money
 Funds required to have all the things that a
person dream of being, having or doing
 Funds that will need beyond peak income
years
 Funding for medical expenses after
retirement
 Invest in long term instruments – bonds,
notes, mutual funds.

14. Asset Classes
Investment Classes
Equity Fixed
Income
Securities
Real
Estate
Precious
Objects
Derivatives
and
Structured
Products
Commo
dities

15. Asset Classes
 Equity
 Rewards associated with equities
○ Dividend
○ Capital Gains
○ Right to subscribe to new shares
○ Right to vote
○ Right to information
 Risk Associated with equity
○ Residual capital
○ Capital Loss
○ Liquidity risk

16. Asset Classes
 Real Estate
 Residential House
 Commercial Property
 Agricultural Property
 Suburban Land
 Real Estate Investment Trust
 Precious objects
 Gold
 Silver

17. Asset Classes
 Fixed Income Securities
 Issued by govt., govt. agencies, state govt.,
corporation, municipalities, banks.
 Cash flow promised to buyer represent
contractual obligations on issuer.
 Stream of payments by way of interest and
repayment of principal at maturity.
 Mutual Funds

18. Asset Classes
 Commodities
 Includes all kinds of goods
 Types of commodities
○ Energy
 Primary – crude oil, coal, natural gas, nuclear fuel
 Secondary – electricity, refined oil products, diesel,
petrol, LPG
 Half-products – petrochemicals, ethylene
○ Mineral ore – iron, steel, copper, zinc, gold,
silver, platinum, aluminum
○ Agricultural food products – wheat, corn, rice,
tea, coffee, apple, grapes, cotton, jute, fish

19. Asset Classes
 Derivatives and Structured Products
 Derivatives – derives its value from some
underlying asset like securities, currency,
commodities or stock.
 Types of derivatives
○ Exchange traded derivatives
 Future contract
○ OTC derivatives
 Forward contract

20. Products in WM
 Direct Equity
 Mutual Funds
 Insurance
 Structured Products
 Private Equity
 Real Estate
 Estate Planning
 Commodities