Intermediaries including advice and distribution

Overview of the Indian mutual fund industry in 2023

The asset management industry in India is experiencing brisk growth in assets under management driven by financialisation and expectations for further penetration into an untapped growing population. The article aims to provide an overview of the industry highlighting key trends. MFs, dominated by equity, being challenged by AIFs McKinsey estimated the industry’s overall AUM increased

Start researching mutual funds with AMC dossiers

Start researching mutual funds with AMC dossiers Some believe selecting mutual funds is easy. Just look at the short and long-term ‘track record’, perhaps relative to the relevant index and peers. Others use ‘risk-adjusted performance’ instead, which in practical terms means using a ratio like Sharpe Ratio, Information Ratio or Sortino Ratio. The sophisticated add
mutual fund star ratings

Do mutual fund ratings work?

Investors and advisers often use ‘star ratings’ to select the ‘best mutual funds’. They assume that the mutual fund ratings, whether denoted by stars or numbers (1 to 5) or alphabets (A, B etc) or metals (gold, silver etc), would be helpful in their selection of funds that will outperform in the future. We have

Wealthtech in India

Wealthtech, also sometimes referred to as Investtech or robo-advisory, is still nascent in India. We take a look at some players.

Voice of the private banker

Money Management India partnered with one of the largest recruiters in financial services in India, Native, to conduct a survey of private wealth managers (PWM) in India to understand some key trends around client and RM preferences. We asked questions in three key areas – What do private bankers seek from the firms they work

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

Connected strategy for wealth management

A recent whitepaper by Alexis Calla, Sandeep Mukherjee, Nicolaj Siggelkow and Christian Terwiesch asserts that the Asian wealth management industry is currently largely analog, disconnected and lacks scale, relying on people for most aspects of the customer journey. The paper adapts the framework from a book ‘Connected Strategy‘ by two of the authors who are

Asset management industry profits

The Indian asset management industry assets under management have crossed INR50 trillion (~$370+ bn). Revenues average about 53 basis points. With costs of around 13 basis points, the profits have improved to around 40 basis points. Profits add up to INR 6,859 crores (~$920m) according to an article in the Business Standard, quoting Value Research

India’s pension system needs work

India’s pension system ranked 40th out of 43 national systems, according to the Mercer CFA Institute Global Pension Index. The index compares 43 retirement income systems with respect of adequacy, sustainability and integrity. Here is the link to the press release and report. Mercer CFA Institute Global Pension Index press release for India

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

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

The market for private wealth

India has been a promising wealth management market for a while. The growing ‘middle class’ is part of folklore. The rich Indians may not be as ‘crazy’ as the Asians in terms of conspicuous consumption but the numbers have been growing steadily. So the prospects for the  wealth management industry, as a whole, and the

Private wealth’s value proposition

While the number of high net worth individuals and the size of their wealth give an indication of the ‘potential market size’ (or total addressable market) for the overall savings or money management industry, we now look at how the wealth industry chooses to respond to client needs. In other words, we explore the ‘value
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

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

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

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

Factors to consider in compliance monitoring program

Using a tick-the-box approach for monitoring of conflicts of interests will probably lead to regulatory issues and reputational disasters. Wealth firms will need to have code of conduct and conflict of interests programmes adjusted so as to be appropriate for their business model. Conflicts of interests are everywhere. Firms in financial services, especially in wealth

Family offices generating interest

The number of high net worth individuals in the Asia Pacific region has touched 4.3 million, equaling that to that in North America, according to the CapGemini World Wealth Report 2014. Yet the number of family offices in the region, numbering just over 100, ‘does not reflect the boom in regional wealth’ according to CampdenFB.

Optimising wealth management business levers

Talent, product and customer segmentation are the key levers a private wealth firm can pull to decide on its business strategy, according to Sridhar Srinivasan, partner & India head at consulting firm Oliver Wyman. Targeting white space Oliver Wyman’s 2012 ‘Targeting the White Space’ report estimated emerging Asia had US$11 trillion of unmanaged wealth, making

Empowering rural India

Inspired by the movie Swades, Ronnie and Zarina Screwvala founded the Swades Foundation that operates with the single-minded focus of empowering rural India. Screwvala believes, “India cannot rise to its true potential without a fundamental transformation in the lives of people in rural India”. “For over a year, we met other philanthropists, visited many villages

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,

Using assessments for better recruiting

Most wealth management firms rely on interviews for their recruitment process, which can be time-consuming and may not provide all the information about the candidate necessary to make a sound recruitment decision. In an interview, it may not be possible to assess if the candidates have all the skill sets required for the job or

Guide to Wealth Management in India

The Hubbis Guide to Wealth Management in India is a compilation of articles and interviews with industry leaders during 2011, 2012 and 2013. Please email [email protected] to get the guide.

Philanthropy getting organised

While Indians have had a long history in philanthropy, the space has not been organized. However this is changing, probably not co-incidentally, with the transfer of wealth to the younger generation which is more technologically savvy and wants more transparency. Philanthropy has a deep and broad foundation in Indian society, though it’s only recently being

New paradigm – blending returns and impact

Families typically invest their portfolio in ‘traditional’ investments such as equities, real estate, cash etc with the aim of maximizing returns, while allocating a small part of their wealth to philanthropy. However, they could look at following global institutional investors’ example and combining returns and impact through Responsible Investments and Impact Investments. Wealth planning discussions

Family wealth governance

While a lot of the discussion on wealth planning is focused around the legal structures and documents, a crucial area that could make or break the intent of these structures is the governance. Families are starting to discuss governance, not only related to succession planning in the family business, but also in the management of

Investing in a multi-jurisdiction maze

Wealthy families rarely have all their wealth in their home country – they tend to accumulate and invest in multiple places around the world. This means navigating a maze of regulatory and tax environments. Indians are living and investing overseas Wealthy Indians spend a lot of time outside of India, whether it is for business,

Managing trusts

Once a family decides to set up a trust, it has to select service providers to help set up the trust and also to help manage the trust. The ongoing management is done by the trustee, protector and administration provider. Families can appoint family members or friends as individual trustees, or a corporate trustee –

Using trusts properly

Trusts are a flexible tool to achieve most wealth planning needs. However, there are various types of trust structures available, hence it is vital that trusts are properly understood and used in the right ways. Overcoming misconceptions, and eliminating mis-selling of trusts, combined with better education on the value and application of use these structures,

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

Practical estate planning

While wealth planning encompasses a wide range of topics, the most significant one is trans-generational wealth transfer though estate and succession planning. The simplest way to execute estate planning is leaving a will, but even this not universally done. Given the multiplicity of succession laws applicable in India, and the inefficiency of the legal system,

Wealth planning basics

Shailesh Haribhakti, chairman of DH Consultants, discusses how wealth planning is developing as a key element of wealth management in India. 1. What are the main issues in wealth planning in India? (5:09) 2. What advice would you give to a relationship manager on how to advise on these complex issues? (2:32) 3. Why aren’t

Family business governance

Sunil Shah of Evergreen Family Business Advisors explains why Indian family businesses seek advice on governance, and outlines what they are looking for. 1. What is the nature of the interest that family businesses in India are showing in terms of governance? (5:01) 2. What are some of the characteristics of Indian families which makes

Understanding risk profiling

  Paul Resnik of Finametrica explains the concept of risk profiling and the stability of the risk tolerance measure over time.