Hansi Mehrotra is the current editor of Money Management India. Hansi has been writing and editing investment content for over 20 years. She writes for CFA Enterprising Investor. She has also been a member of the CFA Institute since 1999.

the private wealth issue

Private wealth….the wealth of private clients. The term ‘private client’ implies there is something private about them. The term has become synonymous with ‘high net worth’ investors. They are different from ‘individual or retail investors’ who may need help with making financial decisions. They are also different from institutional investors, which are sophisticated but may

Delivering private wealth services

Having decided which products & services will be offered and then done some high level marketing activities, private wealth firms deliver these services in a ‘high touch’ way – through very senior private bankers (PBs), wealth managers (WMs) and relationship managers (RMs).  We now look at the ‘final mile’ – the sales, advice and relationship

Marketing luxury advice

Private wealth caters to high net worth individuals, who are also consumers of luxury goods and services. So is private wealth/banking a luxury service? Does the private wealth industry use luxury marketing techniques and do they work? We explore. Defining luxury services Defining luxury services should be easy – ‘turns out it’s not. Apparently, the

Private wealth product platform

Having decided on the value proposition, let’s look at the specific products & services (features in a tech context) that the Indian wealth management industry has decided to offer.  Firms were very clear that they can help ‘manage and grow’ wealth, not ‘create’ wealth. Their clients, whether entrepreneurs, inheritors or professionals, were better able to

High net worth investors – client segmentation & needs

Having established that there is a reasonably large, and growing, number of potential clients with wealth, we need to ask what their needs are. What does ‘managing wealth’ actually mean? Client segmentation – beyond source of wealth We can safely assume that all potential clients – the high net worth individuals – are not the

Private wealth industry – size & players

As outlined in the value proposition article, it is hard to estimate the size of the private wealth management industry for a number of reasons.  Some firms include their affluent customers in their publicly available figures for AUA and revenue which is a bigger and more crowded segment. Private wealth firms compete with numerous other

Bond markets: issues and implications

This post collates some of the issues being highlighted by experts regarding the Indian corporate bond markets, and the implications for debt mutual funds. Debt funds are risky… Suyash Choudhary, head of fixed interest at IDFC AMC, outlines the market structure and issues – The macro Markets for financing in India Behavioural thinking and operating
why financial coaching

What can financial advisers call themselves?

I used ‘educator’ on my LinkedIn heading before being told it sounds like a professor. Not that there is anything wrong with being a professor – I would love to be one, in fact – but it just intimidates my audience of mostly women and young people (for The Money Hans initiatives). I could tell
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Global investment consultants eyeing India?

India has been wooing foreign investments, both directly as foreign direct investments (FDI) into companies as well as indirectly as ‘foreign institutional investors’ (FIIs) or ‘foreign portfolio investors’ (FPIs) into its capital markets and alternative investment funds (AIFs). FIIs already hold a significant portion of India’s listed equity market, affecting daily market fluctuations. However, the
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Does ETF liquidity matter for investors?

The Indian asset and wealth management industry laments the lack of liquidity in ETFs, encouraging investors to buy passive funds instead. But what is liquidity and does it matter? In the recent past, two papers have been issued to address this topic – The CFA Society India issued a report on ETFs generally with some recommendations
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Making information flow more efficient

Finance is the nervous system of the world. However, many parts of the finance industry are inefficient, which has significant repercussions. The world gets major mood swings, at times throwing up excesses. I believe we could alleviate some of the symptoms by making some information more transparent so that it travels more efficiently. Let me
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Do you need an investment philosophy?

Recently, I was invited to participate in a panel discussion on the ‘Art & Science of Stockpicking’. I was fascinated by the topic because I had studied both art and science (actually literature and biology) at undergraduate level and then had chosen finance as a career. I had researched investing somewhat (remember this was 25

Fund categorisations: confusing segments and style

The Indian media has been discussing SEBI’s circular on categorisation and rationalisation of mutual funds ever since it came out in October 2017. I had written about the need for better fund classifications last year, so I didn’t comment further. But the news that AMFI has asked SEBI to reconsider has prompted me to share
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Can better fund research fix capitalism?

“We have met the enemy and he is us.” — Walt Kelly We blame capitalism for most of our modern ills, from climate change to iPhones that die every two years. Yet we rarely bother to read the sales pitch our accountant, banker, or adviser gives us for the mutual funds to invest our hard-earned
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The value of dumb questions

Being an outsider, as I have been for most of my life, brings with it a feeling of inadequacy. To hide this feeling, I did what many others do – I would preface questions with ‘Hey, I am new here….may I ask a dumb question?’ Today, I care less about what people think of me,
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Has goal-based investing ruined Modern Portfolio Theory?

Modern or mean-variance portfolio theory (MPT) is an important financial concept. But it has little practical value for retail investors when it to comes to asset allocation. Recently, goals-based investing has grown popular with both financial advisers and robo-advice tools. Financial advisers continue to apply an ‘”asset allocation overlay” check to ensure goals-based portfolios are
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What can blow up in your portfolio?

That’s the question investors should ask when assessing portfolio risk, rather than focusing on volatility. Speaking at a speaker event organised by Indian Association of Investment Professionals (IAIP), Raj Manghani, the Managing Director – Financial Analytics for MSCI, explained scenario analysis and stress testing. Testing the ability of a portfolio to withstand shocks in liquidity, markets and
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Classifying funds

Investment decisions rely on performance of funds universe including that of the median and various quartiles. Hence, the universe category definitions and classifications are very important. Unfortunately, AMCs have multiple funds in the same category with significant dispersion in returns. To make it worse, leading rating houses have different classification methodologies resulting in different classifications.
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Funds research…deconstructed

I love watching cooking shows. It doesn’t matter that I don’t cook. I watch for enjoyment sake, and perhaps for the comfort of knowing that in a cooking emergency, I will be able to put something together. One concept that I always get fascinated by is that of ‘deconstructed’. Chefs separate or deconstruct the ingredients
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Why we need active funds

The active versus passive debate rages on. The passive camp points out that active funds, in general, don’t do what they are supposed to do – outperform the passive benchmark. They charge high annual management fees, even in the years they underperform. They encourage intermediaries to charge fees or commissions to select amongst them (or
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Why good mutual fund research is hard to find

There are many brilliant books on stock picking, from simple beginners’ guides to classic textbooks like Ben Graham’s Security Analysis and The Intelligent Investor. I could find only one credible book on mutual funds: John Bogle’s Common Sense on Mutual Funds. Bogle’s advice? Investors should put their money in index funds. A number of finance luminaries — Warren Buffett,
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Why you shouldn’t invest in 5-star rated mutual funds

Ask any investor how they select mutual funds (MF) – the most common answer tends to be on the basis of star ratings. Such is the allure of stars that it doesn’t appear to matter whose stars. I know so, because I spent my career in fund research. And no matter how different my firm’s
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Role of financial ratings

When people hear the leader of a country comment on how a credit rating agency should rate its debt, they realise credit ratings are important. When they read about the role of credit ratings in the global financial crisis, they get angry about the finance industry being responsible for their misery, but figure they must
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How Nobel prize winners invest

Everyone in finance would know about the efficient frontier… it’s a concept from Modern Portfolio Theory put forward by Harry Markowitz in the 1950s. So Markowitz is like God in the world of portfolio management. I was always curious about how Markowitz invests his own portfolio. Imagine my delight when I found the answer in

Making sense of too many products

Like in many other markets, the mutual fund industry the world over seems to have a dazzling choice of products, but with the top few dominating assets under management and inflows. In the US, there are more funds than stocks. Even in a nascent market like India, there are more than 1,000 choices, and that’s
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Does robo-advice work?

Tech start-ups are hot. Within that, ‘fintech’ is hot. And within that, ‘robo-advice’ is a term that’s starting to be bandied around even in the Indian market. What do these terms mean and why are they relevant to anyone associated in the asset/wealth management industry? (By the way, I have combined the wealth and asset
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Choose your value proposition

Unlike medicine where there is a clearly defined distinction between the general practitioner and various specialists, wealth management is a grey area the world over. While global regulators are increasingly separating brokers/distributors from advisers based on compensation source, wealth managers can still choose their own business model and area of focus based on their own
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Fund managers need the right temperament

What kind of people make good fund managers? While everyone should be interested in this question, there is surprisingly little research on this topic. Dr Jack Gray talks to Hansi Mehrotra about his efforts and findings. While the general perception may be that investments is about numbers, investment professionals everywhere agree that money management is
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Intro to Modern Monetary Theory

Being a professor in risk management, Professor Frank Ashe had to explain the biggest risk event in recent history – the global financial crisis. He went back to basics to understand the genesis of the credit bubble, in the process discovering Modern Monetary Theory and how government deficits are not as bad as people think.
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Role of credit rating agencies

Credit rating agencies have been criticized for their role in the 2007 sub-prime crisis, which led to the global financial crisis, but it wasn’t until a recent lawsuit exposed their internal emails that it became clear to what extent they were responsible. While the global financial crisis can’t be blamed on any one in particular,
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Demand for wealth planning

There is an undisputed need – and opportunity – for wealth planning structuring in India for the ever-growing number of wealthy entrepreneurs, families, and other individuals. The challenge for wealth managers continues to be how to make the most of this new “once in a lifetime opportunity”. There are numerous drivers for the increasing importance

Forget track records for responsible investing

The United Nations Principles for Responsible Investment now claims over 550 signatories with more than USD 18 trillion in assets. UNPRI provides a framework for institutional investors to integrate environmental, social and governance (ESG) factors into investment processes. Also, the International Finance Corporation has sponsored a study on the prevalence of RI in emerging markets.
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